Community Housing Investment Program (CLOSED)

Getting Started

Contact Information
(913) 573-5100   |   F: (913) 573-5115   |   canderson@wycokck.org

The Unified Government of Wyandotte County/Kansas City Kansas, through Community Development Department is offering a second mortgage for homebuyers. This program is called the Community Housing Investment Program (CHIP). CHIP is designed to leverage private mortgage funds to assist targeted income households in purchasing a home. Funds for the second mortgage are provided through Housing Urban and Development HUD/HOME program.

Maximum Purchase Price
Maximum allowable purchase price $168,000.00 on existing properties an $261,000.00 on new construction. Approved applicants can receive a maximum of $14,999.00 in CHIP funding. Funding for properties that exceed the sale price of $75,000.00 will be capped at $14,999.00.

Homeownership Requirements
Applicants CANNOT OWN any real estate at time of closing or be a PREVIOUS CHIP participant.

CHIP Income Guideline
The eligible loan amount is based according to the HUD median income level. Eligible household income must be at or below 80 percent of the area median.

HUD Median Income Levels           Subsidy As A Percent Of The Selling Price
download.png            80% And Below           Up To ∙ 20% Subsidy  
                                                       Not  Exceed $14,999.00

Follow Guide According To Family Size
80% is the maximum allowable income for household according to the family… 

2020 HUD INCOME LIMITS
Subject to change yearly

Family Size 80% CHIP
1 $48,200
2 $55,050
3 $61,950
4 $68,800
5 $74,350
6 $79.850
7 $85,350
8 $90,850

Effective March 30, 2020


Important Information

Remember This Important Information:

Buyers must use a lender on the approved Lenders List 2020.(DOCX, 16KB) If you have been PRE-APPROVED by a lender NOT in the Kansas City, KS Lenders Consortium, that lender cannot request CHIP funding on buyer(s) behalf. If that lender does have an interest in joining the KCK Lenders Consortium, they must call our office for the Consortiums Information Packet.

The director of Community Development will review the lending institutions submission. After it is reviewed and IF approved, it will be forwarded to the Kansas City KS Lenders Consortium Board. There must be a unanimously vote to approve the request. This process may take several weeks to receive a final answer.

Buyer(s) lender can request the Lenders Consortium packet by contacting:
Cecilia Anderson, (913) 573-5129   |   Email
 
Getting buyer(s) household pre-approved through a consortium lender is advised before contacting the CHDO’S agent (Community Housing Development Organization). Knowing the approved loan amount will better enable you to choose a property in the appropriate price range.

Once buyers have been approved through the lender, a complete CHIP packet will be submitted to Community Development by that lender. If additional information is needed to underwrite buyer(s) file, a letter requesting those items will be forwarded to buyer(s) lender and the buyer; therefore, make sure you provide the correct mailing address, and advise the  lender if that address changes throughout the process. The file will be placed on hold until the file status has been satisfied. The file will then be underwritten, and submitted to the Community Development loan committee.

NOTE: Only complete files will be reviewed by the committee. If buyer(s) request is approved for CHIP funding, an approval letter will be mailed to the buyer, and a copy forwarded to buyer(s) lender.

Buyers Information
CHIP Liaison will not share information regarding buyer(s) loan status with the realtor, friends, or any inquiring family members.

IPMC Inspections
If a property is submitted with the packet, an inspector in the Community Development Department will contact the appropriate parties (realtors or sellers) to perform the required International Property Maintenance Code (IPMC) inspection.

All properties must pass the IPMC inspection. Once the property has passed the IPMC inspection, buyer(s) lender and realtor will be notified. 

Initial Items Buyer(s) Lender Will Need to Start Buyer(s) Loan Process:

  • Account numbers and addresses for all bank accounts:
    • (3) Months of buyer(s) most recent bank statements
  • Account numbers & addresses for all loans in the applicant’s name:
    • Credit cards, Student loans, Car loan, etc….
  • Name and addresses of all landlords for the past (2) years
  • Previous (2) years SIGNED Federal & State tax returns along with schedules
  • Previous (2) years of supporting W’2s
  • Proof of all income in buyer(s) household:
    • Child support, Social security, disability, Alimony, etc….
  • Buyer(s) most recent statements from assets such as:
    • 401’s, profit sharing, IRA’s, etc….
  • A formula will be used to determine if these assets are to be added to buyer(s) household income. If the buyer has a contract pending on a property at the time of application, a copy of that contract should be given to the loan originator, along with any addendum.
  • Any properties that were constructed before 1978 must have a lead base addendum signed and submitted with the signed sales contract. 
  • Homebuyers Education Certification
    • Buyers are required to receive a certificate from a HUD certified approved instructors.
    • ALL married couples are required to attend the class.
    • ALL married couples will be required to sign the UG CHIP closing documents

The submission of the buyers CHIP application to the Unified Government will be reviewed by the CHIP liaison. If during the review, additional documentation is needed in order to do a complete assessment of the buyers household, said request will be submitted to the lender and the buyer. Therefore, the buyers should make sure the contact address is recorded on the lenders application to assure any inquiries are received. If the requested documentation is not provided, the buyers file will not be presented to the loan committee. All requests are reviewed in the order they are received, and funding accordingly.

CHIP Income Guidelines

The eligible loan amount is based according to the HUD median income level. Eligible household income must be at or below 80 percent of the area median.

1. HUD Median Income: 80% and Below
2. Applicants Must Infuse: A minimum of $500
3. Loan Amount $1,000 - $14,999: Loan Term: (5)yrs
4. interest Rate - (0%)= ZERO PERCENT

NOTE: CHIP program guidelines do not dictate the loan term agreement between the First Mortgage lender and the borrower

Family Size     CHIP
1 $48,200
2 $55,050
3 $61,950
4 $68,800
5 $74,350    
6 $79,850
7 $85,350
8 $90,850

Conflict of Interest

Community Development is apprised of “The Conflict Of Interest Clause” by the Department of Housing & Urban Development (HUD), our funding source.

Per HUD’s requirement under CPD 98-9, any applicant that is an employee of a Participating Jurisdiction (PJ) and wish to apply for assistance through a HOME-Assisted Activity, HUD must determine if there is a conflict of interest. The PJ Unified Government (UG) must request an “exception to the conflict of interest” from HUD for the applying applicant’s.

This step may increase the length of an U.G. applicant’s response from the UG in regards to the applicants request for CHIP funding. The turnaround time in receiving a response from HUD is unknown.

The CHIP program is a program that is worthy of a qualified buyers time and effort; therefore if you remain interested in applying for CHIP funding to help assist with the purchase of your home, review, shop, and choose a lender from the participating lenders(PDF, 213KB)  to continue the application process.

Note: The concern with "The Conflict of Interest" only applies to individuals who are employees of the Unified Government.

Homebuyer Training

All applicants must complete a (8) hour Homebuyer Education Training course; this includes all adults that are on the CHIP-HOME loan. All trainings must be HUD approved classes and a live trainer. For additional information regarding HUD Homebuyer approval, see the websites below.

(NO VIDEO or ONLINE TRAINING CERTIFICATES ACCEPTED).

NOTE: Providers may charge a fee, please inquire. Recipient will be responsible for the cost of the class and materials. Homebuyers education is mandatory to participate in the chip & the nsp program.

Home Buyers Education Specialist 2020(DOCX, 73KB)

Additional Information

HUD Approved Housing Counseling Agencies - Kansas
HUD Approved Housing Counseling Agencies - Missouri

International Property Maintenance Code (IPMC)

Ensuring that housing assisted with federal funds (HOME Investment Partnership Program) meet the minimum standards as pertains to the health, safety, and welfare of the potential home buyer.

The Unified Government has adopted the 2009 IPMC; therefore all property inspections shall adhere to said code.

Scope

All homes purchased through the CHIP program must pass inspection by Housing and Community Development Division. After receiving the inspection notice from the CHIP loan processor, the inspection department will contact the necessary parties to gain access to the property and will identify any deficiencies pertaining to the IPMC and shall notify in writing the appropriate party.
Items at a minimum must meet the basic health and safety standards:

  • Premises must be free of any code violations
  • Foundations, roofs and chimneys must be in good condition
  • Windows-all glazing materials shall be free of cracks and holes; every window (other than fixed windows) shall be easily operable and shall have insect screens
  • Doors providing access to a dwelling unit must be equipped with a deadbolt lock mechanism and a throw of not less than 1-inch.
  • The interior of a structure and equipment therein shall be maintained in good repair structurally sound and in sanitary condition.
  • Handrails – every exterior and interior flight of stairs having more than four (4) risers shall have a handrail on one side of the stairs, and every portion of a stair, landing, balcony, porch, deck, ramp, or other walking surface, which is more than thirty inches (30”) above the floor or grade below, shall have guards
  • Bathrooms shall have an operable window or mechanical ventilation system vented to the outdoors
  • Clothes dryer exhaust shall be independent of all other systems and shall exhaust per manufacture’s instruction
  • Water heating facilities must have an approved pressure relieve valve and relieve discharge pipe – (copper gas lines are not permitted)
  • Electrical service shall not have a service rating of less than sixty (60) amperes and each circuit shall be properly identified on the panel board
  • Electrical equipment - two (2) separate and remote outlets shall be present in each habitable room; each bathroom, and laundry area shall contain at least one (1) GFCI receptacle as well as any existing receptacle within six feet (6) of a water source (shall be protected, i.e. kitchen and bathrooms)
  • All painted surfaces, exterior and interior shall be in stable condition and free of peeling, flaking, and chipping paint
  • Battery operated smoke detectors shall be present in each bedroom and on each floor level
  • Licensed Mechanical Inspections are required for every property that is requesting CHIP funding, except for a newly constructed dwelling, or an extensively remodeled dwelling that has been permitted, and approved for occupancy by the Building Inspection Department.

Limits

The inspection is a visual, non-destructive examination of the major components of the dwelling, and is not a guarantee of the future condition thereof. The inspection may be limited by a number of factors that prevent full visual assessment, i.e.:

  • concealed electrical
  • foundation
  • septic/water lines
  • wall Plumbing
  • floor and wall coverings
  • weather conditions, and
  • other personal property

Inspectors are home inspection generalists. They are not licensed engineers, or licensed electrical or mechanical inspectors. The Director reserves the right to grant modifications on an individual case basis, if the situation warrants and has no adverse effect on the structural integrity of the dwelling. 

A mechanical inspection report is required from a licensed home inspector before CHIP inspector does their required inspection.

Loan Terms

A second mortgage will be placed on the property in the amount of the total funds the CHIP recipient receives.
The loan terms of CHIP assistance provided will be as follows:

1    HUD Median Income∙ 80% And Below
2 Applicants Must Infuse ∙ A Minimum Of $500.00
3 Loan Amount $ 1,000.00 to $14,999.00 ∙ Loan Term∙ 5 Years    
4 Interest Rate∙ (0%) Zero Percent

NoteCHIP program guidelines do not dictate the loan term agreement between the first mortgage lender and the borrower.

Loan Deferral

The Unified Government’s second mortgage will be deferred based on the above-mentioned terms with the following conditions. 

  1. The CHIP recipient must live in the property for the term of the second mortgage
  2. The CHIP recipient must remain in good standing on the first mortgage
  3. The CHIP recipient must remain current on all property taxes
  4. The CHIP recipient must have no property code violations during the mortgage term

  • If ALL the above conditions are met, the Unified Government will totally forgive the second mortgage at the end of the loan term.
  • If the recipient defaults on any of the terms, the Unified Government will request the full amount of the CHIP•HOME funds be paid back to the Unified Government.

Property Standards

All homes purchased through the CHIP program must pass the International Property Maintenance Codes. 

Resale Provisions

If the CHIP recipient ceases to occupy the property as his/her primary residence, i.e, Sells the property, Loses the property through foreclosure, or Converts the property to rental or primarily business use, or refinance.
BEFORE the CHIP loan term expires, then he/she must REPAY the Unified Government the FULL amount of the CHIP funds and any closing cost received. NO PRO-RATA, NO EXCEPTIONS 

Shopping for a Lender

Call several participating Consortium Lenders before selecting a lender (optional). Each lending institution generally has its own processing guidelines, therefore it would be to your advantage to call several lenders to find out their processing procedures, guidelines, fees, etc..
Home Buyers Education Specialist 2020(DOCX, 73KB)
Lenders List 2020(DOCX, 16KB)

Questions you may want to ask:

  • What are your current interest rates?
  • What are your upfront fees?
  • Additional program to coincide with CHIP?
  • What are the lenders credit score guidelines
  • How is this to my advantage?

Target Areas

Eligible properties for second mortgage assistance must be located within the city limits.