We review credit history to determine whether applicants pay obligations on time.
- No bankruptcy in the past 3 years
- Must be a first-time homebuyer
- Debt and mortgage payments must meet program limits
Credit scores are not considered, but credit history is very important.
Creditworthiness and Financial History
Established credit is required and must be proven, including 3-4 accounts with at least a 12 month good payment history. We accept accounts reported to the credit bureau and non-traditional credit sources, such as rent, utilities, loans, and other expenses.
Financial History
- No Bankruptcy: Applicants must not have declared bankruptcy within the past three years, with this period starting from the date of discharge.
- No Open Judgments or Liens: There can be no open judgments or liens against the applicant.
- Credit Report and Payment History: Applicants must demonstrate a strong payment history, with no late or delinquent payments reflected in their credit report. Credit scores are not used in the eligibility assessment. The review emphasizes timely debt repayment and checks for any collections, open judgments, liens, or recent bankruptcies or foreclosures.
- Credit Report Access: Applicants are required to check their credit report by visiting www.annualcreditreport.com. Each person is entitled to one free report from each of the three credit reporting agencies once per year through this service.
Applicants cannot have more than $2,000 in bad debt or collections at the time of application. If approved applicants must agree to resolve these debts 90 day prior to closing. “Bad debt/Collections” only refers to debts that are unpaid and past due – if you have debts that are paid on time each month, this is just considered debt, not “bad debt”. We do not consider medical debt when reviewing applicant debts.
Residency and Rental History
- Must be a U.S. citizen or a legal permanent resident.
- You must have lived or worked in Clinton County for at least 12 months at the time you apply. This program is specifically designed to serve families in our local community.
- No Recent Evictions: Applicants must not have experienced any evictions within the past 12 months.
- Current Rent and Account Standing: Rent at the current residence must be up to date, and all asset accounts (checking, savings, credit union, etc.) are required to be in good standing.
- Rental History: Applicants must demonstrate their ability to manage the financial obligations of maintaining their home/rental unit for the past 2 years.
Homeownership Status
- First-Time Homebuyer: Only applicants who are purchasing a home for the first time are eligible.
Criminal Background
- No Felony Convictions: No household member over the age of 18 may have a felony conviction within the past five years.
- Criminal or Sexual Offender Background: Applicants and all household members will be screened for both. Residents must not have any violent misdemeanors or felonies or be registered on the National Sex Offender registry.
- Current Litigation: Applicant(s) must not currently be involved in litigation that could impact his/her need or ability to pay.
Debt-to-Income Ratio
- Mortgage Ratio: The portion of monthly income allocated to an affordable mortgage must not exceed 30%.
- Total Debt Ratio: The combination of monthly income and all monthly debts and expenses must not exceed 43%.
- We will help you determine this Debt-to-Income Ratio criteria.
Go to STEP 4
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the nation. We encourage and support an affirmative advertising and marketing program in which there are no barriers to obtaining housing because of race, color, religion, sex, handicap, familial status, or national origin.
