Individual Development Accounts

Effective August 1, 2011

Brief Description: Eligible first time homebuyers may receive IDA funds, a down payment assistance (DPA) grant, up to $15,000 toward the purchase a primary residence in Maricopa County. IDA funds are only available to homebuyers who are also using one or more of the following programs:

  • Newtown Community Land Trust program (Chandler, Glendale, Scottsdale or Tempe)

  • Other Newtown sponsored down payment assistance (DPA) programs; (i.e., NSP-DPA, HOME-DPA, ADDI)

  • DPA and / or purchase of a house through another non-profit housing agency that is approved by Newtown

  • DPA provided through a city’s DPA program; (i.e., Tempe CAMP, Phoenix NSP, Chandler NSP)

  • A participant in a Family Self-Sufficiency (FSS) program

IDA funds are a 3-to-1 matching program with a maximum match of $15,000 (for example, homebuyer saves $5,000 to receive the maximum amount of $15,000). Funds may be used toward down payment and/or reasonable and customary closing costs.

The grant funds are provided by the Federal Home Loan Bank of San Francisco, through a member bank, and are secured by a 5-year Retention
Agreement (not mortgage lien) that is recorded against the property; and whereby the homebuyer agrees to remain an owner-occupant of the property for a period of five (5) years. If the homebuyer does not remain the owner-occupant, the homebuyer must repay a pro-rata portion of the grant assistance.

General Eligibility and Program Requirements

  1. Must be a first-time homebuyer (haven’t owned a home in the past 3 years).

  2. Gross household income must be less than 80% of the HUD Area Median Income (AMI) - see chart below. Note: in some cases, depending on the source of the match funds and/or the participant’s income, household income must be below 78% AMI.

  3. Must attend a Newtown First Time Homebuyer Workshop (1 ½ hour) – you must do this before your Enrollment Interview.

  4. Must enroll in Newtown’s Homebuyer Assistance Program. After your application has been accepted you must complete an Enrollment Interview with a Housing Counselor to verify your eligibility, review your income, credit, debt, household budget, and other factors related to your current financial situation, and discuss various programs and products that may be available.

  5. If you already have a Pre-Qualification letter from a lender,
    Uniform Residential Loan Application Form 1003, or executed purchase contract the Housing Counselor will review these documents also. In any case, you must provide those documents to the Housing Counselor before a request for match funds will be submitted on your behalf.

  6. You may work with a Housing Counselor from another agency (approved by Newtown). However, you will still need to complete a Newtown application and complete an Enrollment Interview with a Newtown Housing Counselor.

  7. Must complete an approved homebuyer education class (8 hour).

  8. Must obtain a fixed-rate mortgage loan from a participating lender. Points and lender fees must not exceed 6% of the loan amount.

  9. Ratios cannot exceed 33% / 41%.

  10. Must allow 45 days from Purchase Contract execution date to close of escrow.

  11. Participants agree to pay Newtown a $540 administration fee: $40 at time of submitting an application and $500 at close of escrow. The $500 fee is not charged if the Participant does not purchase a house and use IDA match funds. The $40 application fee is not refundable.

  12. Newtown Housing Counselor must receive a copy of the HUD-1 and review it with Participant prior to close of escrow (review may be by telephone).

Program Specific Guidelines – Federal Home Loan Bank IDEA / WISH

To receive IDEA match funds: Participant must open an IDA savings account with a participating bank, make consistent monthly deposits ($20) for a minimum of 10 months, and must open an escrow on a home purchase transaction within five years of enrollment in the IDEA program. Gift funds are not allowed. Savings must be from “earned income.”

To receive WISH match funds: Participant must deposit funds in an IDA savings account with a participating bank (Newtown may waive this requirement and allow participant to deposit funds in escrow prior to closing). Gift funds are allowed. Homebuyer must open escrow within one year of enrollment in the WISH Program.

Income Limits (FY 2011 Maricopa County Area Median Income)

Family Size 1 Person 2 Persons 3 Persons 4 Persons 5 Persons 6 Persons
Income $37,350 $42,650 $48,000 $53,300 $57,600 $61,850

 

You can enroll online for
Newtown's First Time Homebuyer Workshops
Click here for a schedule

Call (480) 517-1589 for more information

 

Newtown provides accessibility, participation, services and employment for all eligible persons regardless of race, color, religion, sex, handicap, familial status or national origin. Reasonable accommodations will be made upon request.

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