Tuscaloosa Housing Authority HOME-Assisted Homebuyer Program

What is Tuscaloosa Housing Authority HOME-Assisted Homebuyer Program?

Tuscaloosa Housing Authority HOME-Assisted Homebuyer Program is a forgivable loan for homebuyers in Tuscaloosa, Alabama, administered by Tuscaloosa Housing Authority (subrecipient of City of Tuscaloosa Office of Federal Programs).

• The Tuscaloosa Housing Authority HOME-Assisted Homebuyer Program serves first-time homebuyers (no homeownership in the prior 3 years) earning 50%-80% of area median income. The City of Tuscaloosa allocates federal HOME funds to THA, which combines them with program income to develop new-construction homes and provide a zero-interest deferred forgivable second-mortgage. Buyers secure their own primary mortgage, contribute a $1,000 down payment, complete the City's free HUD-certified counseling, and occupy the home as their principal residence under a 15-year affordability period after which the assistance is fully forgiven.
• Zero-interest deferred second mortgage.
• Forgivable over 15 years (prorated).
• Down-payment/gap financing.
• Access to newly constructed homes.
• Free HUD-certified pre-purchase counseling.
• Low $1,000 buyer contribution.
• This is a federal program, so it is available beyond a single state or city.
• Funding comes from Federal HOME Investment Partnerships Program funds (City of Tuscaloosa Participating Jurisdiction) administered by THA as subrecipient, plus THA program income.

Do you have to pay it back?

Tuscaloosa Housing Authority HOME-Assisted Homebuyer Program is forgiven after 15 years, so a buyer who stays that long does not repay it.

• Repayment is triggered by Triggering event within the 15-year affordability period (sale, transfer, refinance, home-equity loan, foreclosure, casualty/condemnation, or ceasing owner-occupancy) requires prorated repayment; fully forgiven after 15 years of owner-occupancy.
• The assistance is recorded in Second mortgage (silent second), subordinate to the primary mortgage position.
• Forgiveness and repayment terms are set by the program and can change — confirm them on the official program page before applying.

Who qualifies?

Tuscaloosa Housing Authority HOME-Assisted Homebuyer Program is open to first-time homebuyers and buyers who will live in the home as their primary residence.

What are the income limits?

Tuscaloosa Housing Authority HOME-Assisted Homebuyer Program limits household income to 80% of the area median income, which varies by county and household size.

• Household income 50%-80% of HUD AMI by household size. Exhibit A 80% AMI maximums: 1-person $34,450; 2-person $39,400; 3-person $44,300; 4-person $49,200. Income determined using Part 5 (24 CFR 5) definition; all household members counted.
• The limit applies to total household income, not only the borrower’s.
• Area median income figures are published by HUD and updated annually, so check the current table for the county before relying on a number.

What kind of home can it be used for?

Tuscaloosa Housing Authority HOME-Assisted Homebuyer Program caps the purchase price as follows: Not to exceed fair-market value per independent third-party appraisal (no fixed dollar cap).

• Eligible property types include Single Family.
• New construction is eligible.
• Manufactured homes are not eligible.

Where does it apply?

Tuscaloosa Housing Authority HOME-Assisted Homebuyer Program is a federal program, so it is not limited to Alabama.

How do you apply?

Applications for Tuscaloosa Housing Authority HOME-Assisted Homebuyer Program go through Tuscaloosa Housing Authority (subrecipient of City of Tuscaloosa Office of Federal Programs), which publishes the current terms and the application steps on its own site.

1. 1

   Take a homebuyer education course

   Required by the program, through City of Tuscaloosa Homeownership Counseling Program (HUD-certified), free in-person 3-4 hour class; certificate valid 2 years; (205) 248-5096.

2. 2

   Contact Tuscaloosa Housing Authority (subrecipient of City of Tuscaloosa Office of Federal Programs) to reserve funds

   Funds are reserved with the provider and are subject to availability.

3. 3

   Work with a lender who handles the program

   Hey Prescott is not a lender and does not accept applications; this page describes the program so a buyer can take it to a lender or housing counselor.