Frequently Asked Questions
If you are a member who would like to participate in the Housing Our Workforce (HOW) program, it’s important that you ask the right questions and have reliable resources. Here are some frequently asked questions about HOW.
What is the Housing Our Workforce program?
Housing Our Workforce (HOW) provides down-payment and closing cost assistance to homebuyers earning more than 80% and up to 120% of the area median income. Through HOW, grants are made to eligible borrowers when they close on mortgages with participating member financial institutions.
What is the maximum amount I can receive in HOW funds?
For 2023, the maximum grant is 10% of the sales price or up to $25,000 (lesser of the two). Each year, FHLBank Boston determines the maximum amount, therefore, the amount can vary on a yearly basis.
Do I need to have a property selected for a member financial institution to submit by HOW enrollment?
Yes. A fully executed purchase and sales (P&S) agreement signed by the homebuyer and seller with a property address is required. This is important because 120% of the area median income (AMI) is derived from a specific state, city or town. The grant funds are on a first-come, first-served basis which is why a property address and P&S are required.
How do I determine if I meet the 120% area median income threshold?
You will work with your institution to determine how this is calculated. Please note we have two homeownership programs, and a homebuyer must be above 80% AMI to qualify for HOW. If not, a homebuyer may be eligible for EBP.
Are there home purchase price limits associated with the program?
Yes. Home purchase price limits must conform with the average area purchase prices for mortgage revenue bonds found here.* The 2022 average area purchase prices will be posted in early 2023.
Can a homebuyer use the HOW program to purchase an investment property?
No. This program is designed to assist homebuyers who are purchasing owner-occupied primary residences. In addition, if the applicant for HOW funds currently owns a primary residence, they must sell the property prior to the purchase of the new owner-occupied, primary residence. They cannot keep the previous primary address and convert it into an investment property.
Can the homebuyer down-payment contribution be a gift or gift of equity?
No. This contribution must be 3% of the homebuyer’s own funds and not a gift or gift of equity. This contribution must be evidenced on the executed purchase and sales agreement or addendum. The homebuyer may receive an additional gift or gift of equity in the transaction; however, these sources of funds will not be considered the homebuyer’s own contribution.
Is there a limit to how much funding an approved member institution can access?
Yes. There is a member enrollment cap of up to $260,000 that is available on a first-come, first-served basis.
Can homebuyers apply directly to the program?
No. Homebuyers must work with a member financial institution that has been approved to participate in the program. The approved members will be posted in mid-March. If you are a homebuyer, please contact a member financial institution to see if they are an approved participant.
If I use a HOW grant to buy a home and then decide to sell the home, do I have to repay the HOW grant funds?
HOW grants are forgivable after five years from the closing date of that primary residence. If you decide to sell the home prior to the five years, you may owe a repayment.
If I sell a home that I purchased with a HOW grant, who do I contact when I am selling the property?
You must contact the member financial institution that provided the first mortgage financing at the time of purchase. The member will contact FHLBank Boston’s housing and community investment staff to see if a repayment is needed.
If I’m a homeowner, how do I calculate or determine the repayment?
The amount owed is calculated by reducing the HOW grant on a pro rata basis per month or days (in favor of homeowner) for the period the home is owned, based on the original closing date and the current date of the transaction. Credit is given for the period that you owned the home. Repayment is due only for the remainder of the five-year retention period and only if the repayment amount is over $2,500.
What if my repayment due is over $2,500?
The Closing Disclosure will be compared from time of purchase to the current transaction to determine if any net proceeds from the sale are realized. The net proceeds calculation will include the household investment while residing in the home.
What do I do if I want to refinance my home?
You have the option to pay back the remaining grant funds or request a subordination. This is a forgivable grant after the five-year retention period expires. Depending on the circumstances, the best option is usually to subordinate the HOW grant to eliminate repayment, but it is up to the homeowner’s sole discretion.
What is a subordination?
This is a legal document that is executed on refinance transactions to change the order of the liens. It is completed when a property has more than one mortgage lien. The subordination moves the position of the HOW grant behind the first mortgage.
Who do I contact if I need a subordination?
You must contact the original member financial institution that provided financing for the property purchase even if you are obtaining refinancing from a different financial institution. The member will contact FHLBank Boston’s housing and community investment staff members to request a subordination approval.
Who do I contact if I need a discharge once my five-year retention period ends?
You must contact the original member financial institution that provided the financing for the property purchase. We recommend contacting the institution’s loan servicing department.
Our 2019 Annual Report highlighted how borrowers used a program grant to buy a home.
*These prices, listed by county, change each year.