Get Started!

It takes less than 30 seconds to move toward homeownership. And it is free. Let us help you.

Portsmouth

CONTACT US FOR MORE ANSWERS

Overview

The HomeTown Program provides financial assistance to qualified households who wish to
purchase a home within Portsmouth City limits and who, without this assistance, could not do so.
This program brings together the resources of the City of Portsmouth and RBS Citizens, N.A. to
help eligible families overcome the financial barriers to homeownership. The program is
administered by the Portsmouth Community Development Department.

Who Can Apply

A qualified household is one who meets the following eligibility criteria:
1. who is a first-time homebuyer (no ownership in a principal residence within the last 3 years).

2. who has a gross household income less than 120% of the Median Family Income for the
Portsmouth-Rochester NH HUD Metro Fair Market Rent Area as defined by the most
recent U.S. Department of Housing and Urban Development income guidelines. All
household income except the following will be included in the total household income
calculation:
a) any income earned from part-time employment by any household member who is also a
full-time student, unless the student is listed on the mortgage application as the coborrower;
and
b) any social security, pension or other retirement income received by any fully retired
household member, unless that individual is listed on the application as the co-borrower;

3. who is currently a resident of Portsmouth and has lived here for the past 2 years or who has
resided in Portsmouth in the past for at least 10 years and currently lives within 30 miles of
Portsmouth; or who is a permanent, full-time City of Portsmouth employee intending to
establish residency in the City of Portsmouth;

4. who is currently 18 years old or older;

5. whose total housing debt ratio (including mortgage loan principal, interest, taxes,
homeowners’ and private mortgage insurance, and condominium association charges, if
applicable) will not be less than 32% of the borrowers’ gross monthly income. HomeTown
assistance will be adjusted to insure compliance with the minimum housing debt ratio
requirement.
 The Community Development Department is funded, in part, by the U.S. Department of Housing and Urban
Development Community Development Block Grant Program.
Revised 3-4-2013

6. whose total housing debt ratio (including mortgage loan principal, interest, taxes,
homeowners’ and private mortgage insurance, or condominium association charges)
generally does not exceed 33% of a mortgagor’s gross income on a monthly basis;

7. whose total debt ratio including total housing debt plus all loans with (10) or more payments
remaining generally does not exceed 38%;

8. who can provide evidence that they will be able to provide the required down payment funds
at closing;

9. who has a history of making timely payments on current and past credit obligations; and

10. who will have less than $3,000 in liquid assets after the loan has closed. (This amount may
be increased by $500 for each dependent household member.) Liquid assets do not include
money held in retirement vehicles recognized by the Internal Revenue Service, such as IRAs
or 401k accounts, or funds held in special savings accounts such as Individual Development
Accounts.

If your household meets the eligibility criteria listed above, you are invited to apply. In all instances,
the applicant’s spouse must be listed on the application as the co-applicant.

Application Review Process

At the time an applicant submits an application to RBS Citizens, N.A., the applicant, if eligible, will
be invited to submit a HomeTown Application and Agreement. Community Development staff will
review the applicant’s Application with a RBS Citizens, N.A. loan officer to determine whether you
the applicant is eligible for participation in the HomeTown Program. In this review, the total
household income reported on this application will be compared to the following income limits.

Household Size Maximum Eligible Income*
One Person $70,560
Two Person $80,640
Three Person $90,720
Four Person $100,800
* Based on U.S. Department of Housing and Urban Development Income Guidelines.
12/2012. Subject to change annually.

In addition, the following will be considered in the review of your application: your status as a past
or current Portsmouth resident or as a City of Portsmouth employee, your current debt obligations
and credit payment history, the balances of your savings (including assets in Money Market Funds,
Certificates of Deposit, 401K plan, savings bonds, etc.) checking accounts, and any other required
information.

The City will review the complete application submission and issue a letter advising you whether you
are eligible to participate in the HomeTown Program. Eligible applicants will be invited to schedule
an appointment with the RBS Citizens, N.A. loan officer to complete a NHHFA Single Family
Mortgage Application or a RBS Citizens, N.A. application. In addition, approved applicants will be
advised of options for completing the mandatory homebuyer education trainings. If demand for
Revised 3-4-2013
funding exceeds availability, participants will be advised that their application is denied due to the
unavailability of funding, however, they may re-apply when funding becomes available.

Mandatory Homebuyer Education Training Program

Eligible applicants will be required to attend a mandatory homebuyer education training program.
Buying a home requires knowledge about housing finance, realtors, home inspections, insurance,
maintenance, and budgeting. Homebuyer education training programs that address these areas will
fulfill the HomeTown homebuyer education requirement.
Training programs offered by agencies listed below meet the HomeTown homebuyer training
requirement. You can learn about training program schedules and locations by calling the numbers
listed on the following page and requesting information about their homebuyer education training
program.
 The Housing Partnership (603)766-3120
 New Hampshire Housing Finance Authority (800) 649-0470
 York County Community Action (207) 324-5762
 Coastal First Time Homebuyer Program (978) 465-4382
You must be able to demonstrate that you have completed an approved homebuyer education
training in order to receive financial assistance through the HomeTown Program. If you would like
to attend a training program offered by an organization that is not listed above, you can contact
HomeTown staff to determine if the training will meet the homebuyer training requirement.

HomeTown Program Assistance

The level of HomeTown program assistance available to you is determined after first mortgage
financing is pre-approved. A pre-approval letter will be issued by RBS Citizens, N.A. outlining the
mortgage program for which you have been approved, the mortgage amount for which you qualify,
your potential monthly repayment obligation and the amount of HomeTown financial assistance to
be provided. Below is a description of the HomeTown financial assistance that may be offered.
 First mortgage financing is available at a fixed interest rate for a 30-year term through the
NHHFA Single Family Mortgage Program or through the RBS Citizens, N.A. Flexible
Mortgage Program. The RBS Citizens, N.A. loan officer will help you determine which first
mortgage financing option best suits your situation.
 Down payment assistance is available through HomeTown in the form of a deferred loan at
0% interest secured by a second mortgage on the home purchased.
 Additional down payment assistance, if necessary, is available in the form of a “sleeper” 3rd
mortgage loan at 0% interest through HomeTown. This loan is due upon sale of the
property.
The amount of assistance offered to you is based on your income and assets. The chart on the
following page identifies the maximum amount of assistance available to households in different
income brackets. The HomeTown Program reserves the right to adjust the income guidelines and
other eligibility requirements as warranted.
Revised 3-4-2013

HomeTown Program Financial Assistance

Households earning:
Less than
80% of
Median
Family
Income
Between
80% – 100%
of Median
Family
Income
Between
100% – 120%
of Median
Family
Income
Maximum Eligible Income for a
Two-Person Household*
$51,550 $67,200 $80,640
Financial Assistance Available:
1st Mortgage Loan through NHHFA
Single Family Mortgage Program or
through Citizens Bank
Eligible to
apply. *
Eligible to
apply.
Eligible to
apply.
Total HomeTown
Down Payment / Closing Cost
Assistance
$50,000 $35,000 $25,000
– HomeTown Down Payment /
Closing Cost Assistance secured by
a Deferred 2nd Mortgage Loan
$15,000 $15,000 $15,000
– HomeTown Down Payment /
Closing Cost Assistance secured by
a “Sleeper” 3rd Mortgage Loan
$35,000 $20,000 $10,000
* U.S. Department of Housing and Urban Development income limits as of 12/2012; subject to
change annually.
The HomeTown Program Financial Assistance chart identifies the maximum amount of assistance
that will be made available. The Portsmouth HomeTown Program will pay any assistance offered
directly to the lender on your behalf.

Your Contribution Toward the Purchase Price

You must contribute a minimum of 1% of the selling price of the property to the transaction. You
must use your own liquid assets (savings, checking, etc.) for the purchase of your home before you
can access assistance through the HomeTown Program. Specifically, you must not have more than
$3,000 in liquid assets on hand after the loan has closed. (This amount may be increased by $500 for
each dependent household member.) Liquid assets do not include money held in retirement
vehicles recognized by the Internal Revenue Service, such as IRAs, 401k accounts, or funds held in
special savings accounts such as Individual Development Accounts.

The Purchase of Your Home

Any new or existing single-family home in the City of Portsmouth can be purchased with financial
assistance through this program. The price of homes purchased with financial assistance through
the HomeTown Program may not exceed the current New Hampshire Housing Finance Authority’s
Revised 3-4-2013

Each of the participating first mortgage financing companies have slightly different requirements for
multi-family and condominium units. All condominium units proposed to be purchased using
NHHFA Single Family Mortgage program must be approved by NHHFA. Approval of a
condominium unit is begun after a purchase and sales agreement is executed. The RBS
Citizens, N.A. loan officer will explain these requirements to you at the time that you apply for first
mortgage financing
Once you find a home you wish to purchase and have negotiated the selling price, you will enter into
a Purchase and Sales Agreement with the seller. You must send a copy of this agreement to the loan
officer within 5 business days of signing. The loan officer will order an appraisal and undertake the
title search and any other applicable tests. If your loan receives preliminary approval, the loan
officer will then issue a commitment letter with applicable information within 2 to 4 weeks. The
loan officer shall schedule the final closing date.
The approving first mortgage company will submit an application to their private mortgage
insurance company. If they are unable to secure a commitment for mortgage insurance from one of
the participating mortgage insurance companies, your loan request will be denied. This will also
terminate your participation in the HomeTown Program for the current application round, but does
not preclude you from re-applying in the future.

After You Purchase Your Home

A HomeTown staff person will contact all individuals and families who purchased homes through
the HomeTown Program within six months of their closing date. The goal of this effort will be to
help you, as a new homeowner, address financial or home maintenance issues that may have arisen
since your home purchase.

Application Process

A summary of the application process is provided below.
1. To apply you must complete a RBS Citizens, N.A. application and complete the HomeTown
Application and Agreement.

2. The RBS Citizens, N.A. Loan Officer will work with the City of Portsmouth Community
Development Department staff, including the HomeTown Committee, to process the
application and to determine eligibility. A HomeTown Acceptance Letter will be provided
to you from the City of Portsmouth if you are eligible.

3. You must schedule an appointment with the RBS Citizens, N.A. loan officer to complete a
first mortgage application within 10 business days of the date of the letter advising you of
your eligibility for program participation.

4. The loan officer will process your first mortgage application. If the application is approved,
the loan officer will issue a pre-approval letter advising you of the maximum first mortgage
amount for which you are eligible as well as the amount of HomeTown financial assistance
which will be set aside for you.

5. You must demonstrate that you have completed an approved homebuyer education training
program.

6. You must submit a copy of the Purchase and Sales Agreement to the loan officer within 5
days of entering into a Purchase and Sales Agreement.
Revised 3-4-2013

7. A Commitment Letter will be issued by RBS Citizens, N.A.. The Letter must be provided to
the City of Portsmouth and a Final Approval letter will be generated.

8. The loan officer will schedule the final closing date.
Failure to fulfill any of HomeTown requirements may be cause for denial of your application. It will
be necessary for you to reapply to the HomeTown Program in order to receive assistance should
this situation occur.

Please be aware that acceptance into the HomeTown Program does not constitute a
commitment for first mortgage financing. Program participants must be able to
meet loan underwriting criteria established by the first mortgage financing company.

For Further Information
If you have any questions about the program, please contact David Moore at 610-7226, in the
Community Development Department, Portsmouth City Hall, 1 Junkins Avenue, Portsmouth.
Revised 3-4-2013
This policy may be amended from time to time. The policy in pace at the time of any subordination
request will govern.
SUBORDINATION POLICY
Adopted May 15, 2003
Consideration of Subordination Requests
Portsmouth Community Development Department
HomeTown Program
Policy:
HomeTown Program participants who would like to request the subordination of their HomeTown
Program loan must submit a subordination request to Terry Poulin, Community Development
Department, City Hall, 1 Junkins Avenue, Portsmouth, NH 03801. Questions regarding the process can
be directed to the Community Development Program Manager (610-7226).
When a subordination request is received by the Community Development Department, the homeowner
or their representative will provide information regarding the particular circumstances for the request.

The CD Department will assess the following:

1. The reason for the subordination request: i.e. is the homeowner attempting to secure a better
financing rate or term, or, is the homeowner trying to withdraw equity from the property;

2. Current value of the property taken from the Assessor records, and whether the taxes are current
on the property;

3. Current appraisal of the property;

4. Amount being refinanced; and

5. Whether the city’s position will remain in the second position behind the first mortgage lender.

Procedure:

A committee, comprised of the Housing Specialist, the Community Development Director and the
Community Development Program Manager, will review all subordination requests.

A subordination request must include the following information:

1. Completed HomeTown Review Form;

2. Appraisal, if applicable;

3. Reason for subordination request;

4. Amount of current first mortgage;

5. Amount to be refinanced; and

6. Amount of equity extracted.

A subordination request will only be considered for approval when all of the above information has been
submitted. A subordination request will not be considered if the result is contrary to the goals and intent
of the HomeTown Program.

A subordination request may be considered for approval if the following conditions are met:

1. The tax payment is current on the property;

2. The first mortgage plus all subsequent liens against the property are less than 95% of the
appraised value of the property;

3. The homeowner is attempting to secure a better interest rate or term for their first mortgage; and

4. The homeowner is not extracting significant equity for any reason other than essential
rehabilitation of the property in conjunction with an existing mortgage.
If the City’s position will drop down a position, then a subordination request will be denied.
If the subordination request is approved, the City will use its own Subordination Agreement (attached)
which will be signed by the City Manager. In no case will the City sign a Subordination Agreement
prepared by others.

The Hometown Program requires that the HomeTown participant occupies the property as their principal place of
residence, and that breach of this requirement is a condition of default.
Revised 3-4-2013