Finance Authority of New Orleans

Bond Loan Program

 

The Bond Loan Program is a low interest rate first mortgage loan offered with or without down payment and/or 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 4% of the mortgage loan amount toward down payment and/or closing cost assistance, except City of New Orleans Soft Second Program participants.

Non-First Time Home Buyers receive a great rate but are not eligible for down payment and/or closing cost assistance.

ALL Borrower(s), except those qualified for the City of New Orleans Soft Second Program, must contribute at least 5% of the purchase price toward down payment and/or closing costs from their own funds. City of New Orleans Soft Second Program participants must contribute a minimum of 1% of the sale price or $1,500, whichever is less. These funds cannot be gifted to the borrower. Click here for more information.

Bond Program Details

What is it?
The Bond Loan Program is a low interest rate first mortgage loan offered with or without down payment and/or 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.

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


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 whose household incomes do not exceed 140% of the New Orleans Area Median Income by household size which in 2013 has been designated under the U.S. Department of HUD guidelines as $72,360 for a family of 2 or less, or $84,420 for a family of 3 or more.


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.


Where can I buy a home?

Anywhere in Orleans Parish as long as the home does not exceed the program’s Purchase Price Limits.


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.

Bond Program Steps to Qualify

 

Visit The Finance Authority of New Orleans website to learn about the program at www.financeauthority.org.


Gather your financial information:

  1. Tax returns and W-2s for the last three consecutive years
  2. Bank statements for the last three months
  3. Pay-stubs for the last three months and financial documents related to all your sources of income:
    • listing of all real estate investments,
    • listing of all investments in stocks and/or bonds,
    • copy of court ordered child support judgement(s), where applicable
    • SSI, DHAP, Retirement income verification documents, where applicable
    • Evidence of other income, where applicable


Determine the first mortgage loan amount you can afford. You can do this by:


Register with a participating homebuyer training organization certified by the Louisiana Homebuyer Training Collaborative, Inc. and take the required 12-hour homebuyer education        and training course.


Complete a loan application with a participating lender. Please bring all documents gathered in step two to the participating lender.


Negotiate an agreement to purchase a home with the seller of a home. You should seek the assistance of a realtor in negotiating the agreement to purchase.


Finalize mortgage application completion with your lender. The lender will review your application, financial documents, etc. and forward it to their underwriter for approval.        Simultaneously, your loan file will be forwarded for review and compliance.


Receive mortgage loan approval.


Close on your mortgage loan.


MOVE INTO YOUR NEW HOME!

 

Previous PageNext Page