Lenders & Servicers

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- Frequently asked questions

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Income Limits
FirstHome Mortgage
$8,000 Downpayment Assistance
$4,000 Downpayment Assistance
MCC

Frequently Asked Questions

1. Are co-signers acceptable?
   Non-occupant co-signers are allowed (generally a parent). A non-occupant co-signer cannot have an ownership interest in the mortgaged property and does not have to meet the Agency's guidelines for first-time buyers, including income limits. For a FirstHome mortgage, we do require the principal borrower to qualify on their own.
   
   Co-borrowers are taking title to the property and must occupy it as their primary residence. They must meet all FirstHome Mortgage guidelines.
   
   
2. Are borrowers required to pay off collections to qualify for the FirstHome program?
   NCHFA requires all individual non-medical collections exceeding $2,500 to be paid in full prior to or at closing, regardless of the Automated Underwriting System (AUS) credit recommendation. For collections less than $2,500, we will follow the AUS feedback requirements.
   
   
3. Does N.C. Housing Finance Agency "gross-up" Social Security income?
   NCHFA will "gross-up" Social Security income by 25% for qualifying purposes only. On a cash flow analysis required for our Downpayment Assistance Program, only the actual Social Security received by that borrower can be used.
   
   
4. Is a dependent, full-time student (18 years or older) required to sign NCHFA's loan documents?
   No, as long as the child is currently enrolled full-time (12 hours) in an educational institution. The lender must provide written documentation such as a letter from the Registrar's office or a copy of the student's current transcript as proof of enrollment.
   
   
5. Does NCHFA require a termite report?
   NCHFA requires a termite inspection on all existing construction properties. If the termite report indicates a present or past infestation, a structural inspection is required by a licensed contractor. A Soil Treatment Guarantee is required on new construction. The one exception is for condominiums, where no termite report is required. Moisture is also a potential problem. If the termite inspector indicates the moisture content is above 18%, then corrective measures must be performed to lower or eliminate the moisture source. Usually a vapor barrier is installed.
   
   
6. Do homeowners have to pay recapture if they refinance their existing Mortgage Credit Certificate loans?
   No. Refinancing an existing MCC mortgage does not trigger recapture. A recapture of subsidy is triggered when a disposition of the financed residence takes place within 9 years of the purchase date. However, homeowners should review the MCC refinance provision to make sure they are eligible to transfer the MCC.
   
   
7. Can the new federal tax credit of $8,000 be used with a FirstHome Mortgage or Mortgage Credit Certificate?
   The $8,000 federal tax credit is a one-time credit administered by the IRS. The 2009 tax credit can be used in conjunction with our first-time homebuyer loan programs (FirstHome or MCC).