2023 Utah New Construction First-Time Homebuyer Grant for $20,000 FAQ
What Loan types Qualify for the new First-Time Homebuyer Program Assistance?
Any mortgage loan offered and serviced by Utah Housing, secured by a recorded deed of trust in the county where the home is situated on a new construction home or newly built but uninhabited.
What Types of Homes Qualify for this Down Payment Assistance?
Any newly constructed or newly built but uninhabited home; is financed by a qualifying mortgage loan; is owner-occupied upon purchase; and is purchased for an amount not exceeding $450,000.
Who is considered a "First-time homebuyer”?
According to 42 U.S. Code § 12852, a first-time homebuyer is an individual who:
a. (and their spouse) has not owned a principal residence during the 3-year period ending on the previous property purchase date.
b. is a displaced homemaker, who, except for owning a home with their spouse or living in a home owned by their spouse, meets the requirements of a).
c. is a single parent who, except for owning a home with their spouse or living in a home while married, meets the requirements of a).
FAQ: Utah's Housing Program Assistance Finance Agency
When will the Program Assistance funds be available?
Program Assistance funds will be available shortly after July 1, 2023. The reservation request date will be announced in June.
When can I apply for Program Assistance?
Once the recipient credit-qualifies with a Utah Housing Participating Lender, the lender may submit a Program Assistance reservation request.
What are the terms of the Program Assistance loan?
The Program Assistance loan is a 0% interest, no monthly payment loan secured by a recorded Deed of Trust and evidenced by a Subordinate Note.
Can I reserve funds before construction starts or before signing a contract?
Yes, and the reservation will have an expiration date defined in the published Program rules.
If I entered into a construction contract before the Program's creation, am I still eligible for Program Assistance?
Yes, if the recipient closes on the purchase of the home and funds after July 1, 2023.
Who will administer the Program and fund the Program Assistance?
Utah Housing will administer the Program and establish rules governing the application method, process, and other criteria used to provide Program Assistance to recipients.
Who will service the Program Assistance loan?
Utah Housing will service both the Program Assistance loan and the qualifying mortgage loan.
Can the Program Assistance be combined with Utah Housing's Down Payment Assistance 2nd Mortgage?
Yes. In this situation, the Deed of Trust for the Program Assistance loan will be recorded in a third lien position.
If I receive Program Assistance and choose not to use Utah Housing's Down Payment Assistance 2nd Mortgage, can I receive a rate reduction on my qualifying mortgage loan?
Based on current market conditions, a rate reduction could be applied at the time of interest rate lock request.
Can the Program Assistance be combined with the Veterans or Law Enforcement and Correction Officer grants administered by Utah Housing?
No. It may not be combined with assistance for VA, Law Enforcement or Correction officer grants.
Must a buyer use a certain lender or loan program to receive the assistance?
Yes. A Utah Housing Participating Lender must be used to obtain a qualifying mortgage loan. Any first mortgage loan program offered by Utah Housing may be used in conjunction with Program Assistance.
How much may I receive in Program Assistance and for what purpose(s) may it be used?
You may receive up to $20,000 in Program Assistance, which can be used for down payment, closing costs, and/or a permanent interest rate buydown for the qualifying mortgage loan.
How many homebuyers will the Program assist?
The $50 million allocated by the Utah legislature is expected to assist approximately 2,500 homebuyers. Future funds may become available based on repayment of Program Assistance received from the sale of qualifying residential units or the refinancing of qualifying mortgage loans.
Is there a maximum purchase price for a qualifying residential unit?
Yes, the maximum purchase price is $450,000.
Why is the Program only for newly-built homes?
The Program aims to assist first-time homebuyers and incentivize builders to produce affordable housing units throughout the state.
Will there be income limits?
Yes. It is anticipated that limits will be similar to Utah Housing's non-FirstHome income limits. Income limits will be further defined when Program rules are published.
Must I be a Utah resident in order to qualify for Program Assistance?
Yes. Any recipient must have been a resident of Utah for at least the previous twelve (12) months prior to closing.
What are eligible property types?
Eligible property types include detached single-family homes, condominiums, townhomes, or similar residential dwellings, including manufactured or modular homes attached to a permanent foundation.
Must the Program Assistance be repaid when the qualifying residential unit is sold or the qualifying mortgage loan is refinanced?
If the recipient completes a sale or refinance, the recipient shall repay an amount equal to the lesser of:
• the amount of Program Assistance the recipient received; or
• 50% of the home equity amount.
https://utahhousingcorp.org/pdf/FTHB_Program_Assistance_FAQ.pdf