How to buy a house with the Lawrence Community Housing Trust.
Housing Trust loans are available only on properties within Lawrence city limits. Homebuyers need two years of consistent verifiable income and consistent bill paying history. Purchase price and income limitations change annually. The Lawrence Community Housing Trust is a nonprofit community housing development organization (CHDO) that partners with the city of Lawrence Neighborhood Resources Department and local lenders to use federal HOME funds and create affordable homes in the Community Housing Trust.
Step 1: Attend a TTH First Time Homebuyers Workshop
Step 2: Pre-Qualification with TTH
Step 3: Session with Housing & Credit Counseling, Inc.
Step 4: Collect information to apply for a home loan
Step 5: Meet with a participating LCHT lender for pre-approval
Step 6: Sign a house purchase contract
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* These steps are a guideline to purchase a home with the Lawrence Community Housing Trust Program.
They are not necessarily all-inclusive. Consult TTH for further details: 842-5494.
Attend a First Time Homebuyers Workshop presented by Tenants to Homeowners, Inc./ The Lawrence Community Housing Trust. These workshops explains the program and how to shop for a home, prepare for a housing trust mortgage application and be a responsible homeowner. The FREE workshops are held on the second Saturday of every odd month at the United Way Center: 2518 Ridge Court, 9:30 am to 1:30 pm. Call TTH at 842.5494 for more information.
Click here for the current workshop schedule.
Meet Rebecca Buford, Executive Director, for a pre-qualifying session. You can get a free copy of your credit history. You will need: Verification of ALL income (i.e. pay stubs, tax statements, benefit statements, child support, retirement accounts, checking and savings account balances). This information determines whether you are income-eligible for the Housing Trust Program. Even if you are income-eligible, you may not qualify for a mortgage pre-approval from a lender. You may need to improve your finances before you get a loan. TTH can only verify that you are income-eligible for housing trust mortgage financing and estimate the amount of mortgage loan you are likely to receive. Ultimately, the lender sets its own standards for pre-approval and is not obligated to approve anyone, even if that person qualifies for the Housing Trust. Their mortgage loan standards may be different from HUD’s program eligibility standards.
Meet a credit counselor at Housing & Credit Counseling, Inc. for a pre-purchase budget counseling session. This important step should not be taken at the last minute. The previous step helps estimate your likely mortgage loan, but this step helps determine what house payment fits your personal budget. Housing & Credit Counseling, Inc is located in the United Way Center, (Room 207) but you must call 749-4224 to make an appointment.
Take the feedback from steps 1-3 and collect records for the loan application. Click here for a list of what to bring to a loan application. When you are ready, make an appointment with a participating Housing Trust lender. If the lender determines that you are eligible for conventional financing at a prime rate and that you can afford the payment, then you are not eligible to buy a house with the LCHT program. Also, please be aware that the income guidelines TTH uses for program eligibility in the pre-qualifying session does not necessarily determine lender pre-approval. The lender needs your workshop certificate, budget counseling session feedback and TTH’s income verification sheet to pre-approve you for a Housing Trust loan.
Click here for more information about what lenders want to see.
When you apply for a loan, the lender gathers all information and estimates how much you can finance. An official estimate, usually with a locked interest rate, is an official pre-approval and the lender writes a “pre-approval” letter. This letter includes your approved monthly mortgage payment. You also receive a letter that shows the price that payment represents with the housing trust program. You must receive pre-approval before you can make an offer on a LCHT home. Sometimes you may not be ready to buy and you just want to estimate how much you can finance. This is less formal and lenders can often give you a good-faith estimate of loan costs, but do not lock in your rate. TTH accepts either a good-faith estimate or an official pre-approval to enter your name in the Prospective Buyer List.
There are two possible ways to get a LCHT home:
1) Be on the Prospective Buyer List and eligible for a TTH home. Click here to see the current list of LCHT Properties for Sale.
Or – if funds are available -(which, right now, they are not)
2) Use the buyer-initiated grant funds to purchase a home on the market that will be added to the housing trust in exchange for a $25,000 grant, closing costs and rehabilitation funds available to write down the initial purchase price. These funds are allocated on a first-come first-serve basis and run out quickly. They are not always available, as the federal funds have been cut in recent years and must go to subsidize TTH’s new construction projects first. To use these funds, the house must also meet strict criteria for city and federal health and safety codes with a minimal rehabilitation budget. Currently, TTH has no funds for buyer-initiated financing.
TTH shows its homes to eligible, pre-approved buyers, who choose whether to sign a contract with TTH. All LCHT homes are either built, rehabilitated or pre-screened by TTH. All LCHT house purchase contracts include contingency clauses that require LCHT pre-approval, signed Letters of Stipulation and Acknowledgement from prospective buyers, and a Housing Trust Orientation Certificate from prospective buyers prior to closing.