Program aiding area's first-time homebuyers

With frequent arctic-like temperatures during February and Sunday's storm dumping more snow, it's been difficult for area residents to find signs that spring is just a few weeks away.

However, one harbinger of the coming change of seasons kicked in today when the Welcome Home federal housing program began accepting applications from would-be homebuyers seeking grants up to $5,000 to get them into new homes by the time temperatures finally warm up.

The Welcome Home grant program, which was established in 1999 under the Affordable Housing Act, is designed to help low- and moderate-income people buy homes.

"It's overwhelmingly first-time homebuyers who participate," said John Byczkowski, assistant vice president of public affairs for the Federal Home Loan Bank of Cincinnati, which is part of the Federal Home Loan Bank system. The program also is open to people who haven't owned a home for three years.

Under the program, participants can receive grants up to $5,000 to be used for down payments or closing costs. According to the FHLB website, among the stipulations are income eligibility (see accompanying chart), completion of a homebuyer counseling program for first-time homebuyers and agreeing to include in the deed wording that the grant will be repaid on a prorated basis if the home is sold within the first five years.

"We expect the money to go fast this year," Byczkowski said, noting the program operates on a first-come, first-served basis. The regional bank sets aside $200,000 for each member bank, including several in Mercer and Auglaize counties, to be used for Welcome Home grants.

Byczkowski said in the past 10 years, the agency has awarded 186 grants to Mercer County homebuyers for a total of $916,900, while in Auglaize County during the same period 114 buyers received $560,000.

Increasing interest in the Welcome Home grants from first-time buyers is seen as a possible indication of strong housing activity this spring.

"We've had more people calling to inquire about the program," said Kathi Miller, Minster State Bank mortgage loan underwriter. The bank was expected to submit five applications for the grants. During the past five years, Minster State Bank has processed 67 grant requests totaling $335,000, Miller said.

"At the time that a reservation of funds is requested, the potential homebuyer will need to have signed a purchase contract for the home they wish to purchase," Miller said.

Miller said the Welcome Home funds were available until late May or early June the past two years, but she predicts that trend to change this year.

"We expect the fund to be gone far more quickly this year as there appears to be a greater need for assistance for the new homebuyer," she said.

Some local lenders report increased real estate activity as spring approaches.

"I hear of places selling in a couple of days," said Shirley Pleiman, assistant vice president of Peoples Bank, which is based in Coldwater. "In spring, things seem to pick up as people think of buying or building." she said. Pleiman said the bank had three applications to file today.

"We've helped 61 people with this grant since we started in 2006," she said.

Pleiman said when Peoples first became involved in the program, some borrowers expressed reservations about participating in the federal program.

"They said 'what's the fine print' " Pleiman said. "But with this program, there is no fine print."  Randy Bruns, loan officer with St. Henry Bank, said the Welcome Home grant program often enables a first-time homebuyer to make a larger down payment. "They can save the price of mortgage insurance," said Bruns, who noted last week he planned to file five applications for grants.

Trever Bransteter, loan officer for Mercer Savings Bank, said its important for first-time buyers who plan to make a purchase soon to file the paperwork for the grants.

"The way the program is set up, when the money is gone, it's gone," he said.

The Welcome Home grants can make the difference between buying a home and waiting longer to come up with the down payment.

"Some people wouldn't be able to buy a home without it," Alice Ahrens of Century 21 Master Key Realty of Celina. She said Realtors inform potential buyers about the Welcome Home program.

After the business set a sales record last year, Ahrens said it is looking for another strong year.

"We've been very strong," Ahrens said of the Grand Lake area sales market.

Following a continuation of a recovery of the housing market in Mercer and Auglaize counties, as well as the entire state, in 2014, indications are that 2015 could yield similar results.

"It is apparent that interest in the Ohio housing marketplace remains strong among buyers as we posted the best-ever rate of home contracts entered into in January," said Greg Hrabcak, president of the Ohio Association of Realtors. "Additionally, the Ohio market has now tallied nine consecutive months of year-over-year gains."

Jennifer Zeller, executive director of the Midwestern Ohio Association of Realtors, said there was good news in 2014 sales results for Mercer and Auglaize counties. "Home values are increasing," she said. The average sale price for Mercer County homes was $117,525 in 2014, up from $106,998 the previous year. In Auglaize County, the average home sale price was $119,856, up from $113,123 in 2013.

Welcome Home grant program:
Maximum income to qualify

	1 or 2 people	3 or more
Mercer	$51,360	$59,064
Auglaize	$50,880	$58,512

Grants in last 10 years

	Number	Amount
Mercer	186	$916,900
Auglaize	114	$560,000