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HPS Program: Frequently Asked Questions




Who can submit an application for HPS Program funds?
Only Bank member institutions in good standing may submit applications for HPS Program funds. Members participating in the HPS program must give public notice of its availability and make assistance available to eligible households on a first-come, first-served basis.

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What are the basic eligibility requirements for homeowners receiving HPS Program funds?
  • Members must enroll households in the HPS Program.
  • Homeowner’s household income at the time of enrollment may not be greater than 80% of the HUD area median income (AMI).
  • Homeowner’s existing first mortgage must have been originated before July 10, 2007, and be a non-traditional mortgage product or ARM with certain features.
  • Homeowner’s existing first mortgage may not have an outstanding principal balance, at the time of enrollment, in excess of $417,000.
  • Homeowner’s net worth at the time of enrollment cannot exceed $35,000 (excluding tax-deferred assets and equity in their primary residence).
  • Homeowner’s equity in the home cannot exceed the greater of $50,000 or 20% of the new appraised value.
  • Homeowner(s) must successfully complete a post-purchase homeownership or credit counseling program.
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How may HPS Program funds be used?
HPS funds may only be used toward eligible restructuring or refinancing costs as defined in the AHP Implementation Plan.

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When can HPS Program funds be disbursed to a qualifying household?
The Bank will reimburse the member for the amount of subsidy that has been funded by the member to the homeowner(s) upon receipt of certification and sufficient documentation verifying the total amount of restructuring or refinancing costs and evidencing that:

  • the member contribution was at least twice the amount of the AHP subsidy contributed by the Bank, and
  • the full amount of the requested subsidy was passed on to the homeowner and used for eligible costs.
In the event there is cash back to the homeowner in an amount greater than $250, the subsidy will be reduced unless the member and the homeowner(s) provide sufficient documentation showing that the cash back was used to pay down the mortgage principal or reasonable and customary closing costs or as a credit toward the homeowner(s) monthly payments on the new mortgage loan. In addition, the following certifications and documentation need to be submitted by the member prior to the disbursement of funds:

  • Certification that the households and units funded satisfy HPS Program guidelines and that the units are subject to a deed restriction or other legally enforceable retention mechanism that meets the requirements of applicable regulations and policies of the Finance Board.
  • A copy of the retention mechanism securing the HPS funds.
  • Documentation verifying that the homeowner is income eligible.
    See AHP Implementation Plan (PDF) and the AHP Household Income Qualification Workbook (.xls).
  • Certification of completion of a post-purchase homeownership or credit counseling program.
  • 2008 HPS Program Enrollment (FC 2314) (PDF)
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How many HPS Program dollars are available to a qualifying household?
The Bank will provide the lesser of $25,000 or one-third of the total eligible restructuring or refinancing costs, as defined in the AHP Implementation Plan (PDF).

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Can HPS Program funds be combined with other Affordable Housing Program subsidies for owner-occupied units?
No, HPS funds cannot be used by the member or the homeowner in conjunction with projects or units receiving subsidy from the Bank through its competitive AHP or the other AHP homeownership set-aside programs, the Individual Development and Empowerment Account (IDEA) and Workforce Initiative Subsidy for Homeownership (WISH) programs.

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When are applications for HPS Program funds due to the Bank?
As of December 1, 2008, the Bank will be accepting applications for the HPS Program on an ongoing basis and awarding grants to members monthly.

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How much has the Bank allocated for the HPS Program in 2008?
In 2008, the Bank has set aside $10 million to fund the HPS Program.

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What will happen if the demand for HPS funds exceeds the amount of funds available?
If the total amount of funds requested exceeds the amount of funds set aside for the HPS program, the Bank will allocate available funds to eligible applicants in accordance with the Bank's AHP Implementation Plan.

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For how long will HPS funds be available?
The HPS pilot program will terminate on December 31, 2009, and the Bank will not commit AHP subsidy to households under the program after that date.

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