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The Bond Loan Program

 

What is it?
The Bond Loan Program is a low interest rate first mortgage loan offered with or without closing cost assistance to the mortgagor. Bond loans may be made to both first time AND non-first time homebuyers.

First Time Home Buyers are eligible for up to 4% of the loan amount toward down payment or closing cost assistance grant. First Time Home Buyers whose income exceeds program limits are NOT eligible for down payment or closing cost assistance grant.

Non-First Time Home Buyers are not eligible for down payment or closing cost assistance grant.

Where do I apply for this program?
Interested persons should apply with our participating lenders.

Who can use this money?
First-Time and Non-First-Time homebuyers of any income.

If I use this program to purchase a new home, may I rent my old home?
Yes. Non-first time homebuyers are allowed to keep their old home, however, the new home must be the principal residence of the borrower(s).

Who is a First-Time Homebuyer?
A first-time homebuyer is a person(s) who has not owned a principal residence within the last three (3) years OR is a single parent who no longer owns a home because of a divorce.

May I use this mortgage loan program with the City of New Orleans Soft Second Mortgage Program?
Yes, only if you are a first-time homebuyer. When applying for your loan at one of our participating lenders, please inform the mortgage originator that you would like to use both programs: the Finance Authority's Low Interest 1st Mortgage Loan and the City of New Orleans' Soft Second Mortgage Program. For more information about the City of New Orleans' Soft Second Mortgage Program please visit www.nola.gov/softseconds.

Where can I buy a home?
Anywhere in Orleans Parish.
City of New Orleans Soft Second Bond Loan participants should consult program guidelines at www.nola.gov/softseconds

Can I sell my home at any time?
Yes. Your loan will be paid off from the proceeds of the sale. There may be a recapture tax owed if the sale occurs within 9 years of your purchase. The tax is on a percentage of any gain you earned on the sale, since you were the beneficiary of low interest federal tax-exempt bond funds to finance your home. [See section 143(m) of the IRC or talk to a tax preparer.]

Do I have to pay the closing cost assistance or down payment assistance back?
Maybe. Down payment and/or closing cost assistance is limited to first-time homebuyers and is awarded as a forgivable soft second loan with no principal or interest payments. The loan is forgivable at 1/60 per month over the first 60 months until fully forgiven. If you decide to sell the home within the first 60 months, any portion of the loan which has not been forgiven by the date of closing will be paid back.