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Assistance to First-time Homebuyers to Purchase a Newly Constructed Home, Never Occupied
Utah Senate Bill 240 (2023) created the First-time Homebuyers Assistance program. This bill provides Program funds to assist first-time homebuyers to purchase a newly constructed home. Up to $20,000 in Program funds can be borrowed for the home. Funds may be used for your down payment, closing costs, and/or a permanent interest rate buy down for a qualifying mortgage loan.
0% Interest Assistance Loan
The Assistance Program loan is a 0% interest, no-monthly-payment loan. In the future if you sell or refinance your home you will pay an amount equal to the lesser of these options: the amount of assistance received or 50% of the home equity amount.
Qualify Today, Find a Home Tomorrow
You can reserve program funds before construction starts, or even before you have a signed contract for a home.
How Can We Help You?
First-time homebuyers can contact Utah Housing Corp to receive more information about this program by filling out the form below or calling us at 801-902-8200.
Frequently Asked Questions
When will program funds be available?
Funding of Program loans will be available for loan closings happening on or after July 25, 2023 (funding request must be
received 3 business days prior to closing, i.e. July 19). Reservation requests may be submitted by a Utah Housing Participating Lender (Lender) beginning Tuesday, July 11, 2023.
When can I apply for assistance?
Once the Recipient has credit-qualified with a Lender for a Utah Housing mortgage loan, the lender may submit a Program reservation request.
What are the terms of the program loan?
The Program loan is a 0% interest, no monthly payment loan secured by a recorded Deed of Trust and evidenced by a Subordinate Note.
Can I reserve program funds before construction starts, or before I have signed a contract?
Yes. All Program reservations will include an expiration date as well as requirements for subsequent extensions.
If I entered into a construction contract prior to the creation of the program, am I still eligible for assistance?
Yes, if the Recipient is issued a Program reservation prior to the closing of the qualifying mortgage loan. Program funds will only be disbursed to a title company licensed to do business in Utah.
Who will administer the program and service program loans?
Utah Housing will administer the Program and will service both Program and qualifying mortgage loans.
Can the program loan be combined with a Utah Housing Down Payment Assistance 2nd Mortgage?
Yes. In this situation, the Deed of Trust for the Program loan will be recorded in a third lien position.
If I receive assistance and choose to not use a utah housing down payment assistance 2nd mortgage, will I receive a rate reduction on my qualifying mortgage loan?
Yes. A rate reduction based on then-prevailing market conditions will be applied at the time of interest rate lock.
Can a program loan be combined with the veterans or law enforcement and correctional officer Grants administered by utah housing?
No.
Must a buyer use a certain lender or loan program to receive assistance?
Yes. A Utah Housing Participating Lender must be used to obtain a qualifying mortgage loan. Any first mortgage loan program offered by Utah Housing may be used in conjunction with a Program loan.
How much may I receive in assistance and for what purpose(s) may it be used?
A Recipient may receive up to $20,000 in Assistance and the funds may be used for down payment, closing costs, and/or a permanent interest rate buydown for the qualifying mortgage loan.
How many homebuyers will the program assist?
Approximately 2,400 homebuyers. Future funds may be available based on repayment of Program funds received from the sale of qualifying residential units or the refinance of qualifying mortgage loans.
Is there a maximum purchase price for a qualifying residential unit?
Yes. The maximum purchase price is $450,000.
Why is the program only for newly-built homes?
The Program’s objectives are to assist first-time homebuyers and incentivize builders to produce affordable housing units throughout the state.
Will there be income limits?
Yes. Income limits are determined by the Utah Housing loan program under which the qualifying mortgage loan is reserved.
When will program funds be available?
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Must I be a utah resident in order to qualify for the program?
Yes. Any Recipient must have been a resident of Utah for at least twelve (12) months prior to closing.
What are eligible property types?
Eligible property types include detached single-family homes, condominiums, townhomes, or similar residential dwellings, including manufactured or modular homes attached to a permanent foundation.
Must the assistance be repaid when the qualifying residential unit is sold or the qualifying mortgage loan is refinanced?
If the Recipient completes a sale or refinance, the Recipient shall repay an amount equal to the lesser of:
- The amount of Assistance the Recipient received; or
- 50% of the home equity amount:
- In the case of a sale, “home equity” is the bona fide sale price minus the unpaid principal balance of the qualifying mortgage loan(s)
- In the case of a refinance, “home equity” is the current appraised value of the qualifying residential unit (as determined by a currently-licensed Utah certified residential appraiser) minus the unpaid principal balance of the qualifying mortgage loan(s)
Mortgage Servicing 801.902.8250 | 800.344.0452
All Other 801.902.8200 | 800.284.6950