SALT LAKE CITY (ABC4) — On Thursday, March 23, a bill was signed into law which created a program that can give assistance to first-time homebuyers.

S0240 creates the First-Time Homebuyer Assistance Program within the Utah Housing Corporation, this program will assist people with low and moderate incomes. The law takes effect on July 1, 2023.

“As someone who has been trying to buy a home for a few years, my husband and I are really excited about the possibility of getting help with our down payment for our first home,” said a potential first-time homebuyer Hannah Vance. “I’m sure this will be a huge help for many first-time homebuyers.”

This program will be available for those who have low and moderate incomes, and according to 42 U.S. Code 12852, this means that the aggregate annual income of the homebuyer and members of the family residing with the homebuyer for the year preceding the application does not exceed 95 percent of the median income for a family of four persons (adjusted by family size) in the applicable metropolitan statistical area.

Vance said they tried to figure out if they qualified, but said the lenders and banks they have talked to have not received information about the bill.

“Lots of people have been asking the banks, ‘What is this?’ ‘Do we qualify?’ But the banks don’t have any information yet. They said to us, ‘we know as much as you do.'”

According to one lender they talked to, it is likely they will need to apply to see if they meet eligibility, but even then they said they haven’t received any information from the Utah Housing Corporation for what that eligibility looks like.

For first-time buyers looking to use the assistance program, the housing they purchase must meet certain requirements. These requirements include:

  • The housing must be new construction, or newly constructed but not yet inhabited.
  • The housing must be located in the state of Utah
  • The housing must be financed by a qualifying mortgage loan
  • The housing must be occupied by the owner upon purchase. This means you cannot purchase a home using the assistance plan if you do not plan on living in it.
  • The housing must be purchased for an amount that does not exceed 450,000 or if applicable, the maximum purchase price established by the corporation

Vance said she believes the government is requiring the houses to be new construction or newly constructed because “they’re trying to encourage builders to build smaller single-family homes that first-time homebuyers can afford.”

A recipient of the First-Time Homebuyer Assistance Program may use program funds to pay for:

  • The down payment on a qualifying residential unit;
  • Closing costs associated with the purchase of a qualifying residential unit;
  • A permanent reduction in the advertised par interest rate on a qualifying mortgage
  • Any combination of the above options.

The maximum amount of program funds that a first-time homebuyer may receive under the program is $20,000.

What is a first-time homebuyer? According to the U.S. code, it can be classified as a person who has had no ownership in a principal residence for three years before the date of purchase of the property.

It can also apply to those who are displaced homeowners or single parents who except for owning a home with their spouse or residing in a home owned by the spouse, and meet the first requirements.

Vance said there are still a lot of unanswered questions she has about SB240 requirements, such as, “Does “newly constructed” include a home you construct yourself?” “What does a qualifying mortgage loan mean?” and, “What will the income requirements be?”