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The Mortgage Counseling Service for First-Time Homebuyers

You will enter the program by attending a workshop to learn the basics of homeownership and get a survey of programs available in your area. To attend a workshop please call the local ACORN Housing office to reserve a space. At the conclusion of the workshop you will be given the opportunity to sign up for a one-on-one work session with one of our trained mortgage counselors. Prior to the work session, you must turn in basic financial information [click here for a checklist] and pay a $20 credit report fee, which enables the mortgage counselor to pull 2 credit reports on your household.

At the one-on-one work session, the AHC housing counselor will review your sources of income and establish how much house payment you and your family can afford. If the household income is inadequate, AHC will offer advice on how to get cosigners, increase available household income, or locate a more affordable property.

The counselor will review the your total debt to determine if you'll be overextending yourself. If the debt exceeds normal lending limits, AHC will work to help you pay off debts, refinance loans, or increase household income.

The counselor will do a credit review, based on the credit report and information that you provide. Each AHC office pulls a "triple merged" credit report, made up of reports by TRW, TransUnion, and Equifax. For people with credit problems, the counselor will work with them on establishing good credit, payment plans, negotiating with creditors, and writing letters of explanation. All people with credit problems or who need to save funds for downpayment and settlement costs will attend the Credit and Budgeting classes. The classes are organized around the actual budgets of the participating families. The classes will assist the family in setting realistic financial goals, developing savings and repayment plans, and establishing a solid understanding of credit responsibilities.

In the interview, your family will get a personalized financial plan from the housing counselor, which will consist of a few achievable goals to move toward home ownership. AHC has considerable experience documenting unconventional income sources, such as self-employment, part-time work, and "off the books" income. AHC has developed the standard on "cash-on-hand," or funds saved at home.

If you have already chosen a home to buy, the counselor will calculate the monthly loan payment, including taxes and homeowners insurance, and apply the appropriate income and debt ratios. If the real estate agent has not already done so, the counselor will figure out the settlement costs for you. AHC seeks out downpayment and settlement cost assistance grants for low income buyers through local Community Development Block Grant programs, the Affordable Housing Program of the Federal Home Loan Bank, and other sources. Some buyers may be able to finance some of these costs through a personal loan.

If the you have qualified but haven't yet found a house, you are directed to real estate agents or to housing providers, such as developers, nonprofit development corporations and real estate agents to look for a house. The counselor will review the agreement of sale to protect the buyer's interests.

Once the financial package is in order, AHC will make a loan referral to a lender. The counselor will completely familiarize you with the loan terminology needed to understand the mortgage loan application process. In order for us to assist you, everyone must sign a confidentiality waiver form which permits AHC representatives to discuss your personal finances and credit with the lender. Finally, the counselor will detail what documents you need to bring for the loan application interview with the lender. Typically, loan applications are taken at the AHC office.

If an application runs into trouble, the housing counselor will intercede on your behalf with the loan underwriter to see what can be done to solve the problem. Counselors will discuss complex or unusual cases with underwriters to determine documentation requirements, structuring of loans, and appropriateness of particular deals.

Finally, your home loan has been approved and closed, ACORN Housing Corporation will stay in touch with you and will provide post-purchase or delinquency counseling if you ever run into trouble making your monthly payments. AHC asks lenders to track the loans of our clients separately and to notify us of any late payments. For us to get this information from lenders, we ask that you give permission to your lender to disclose it.

ACORN HousingÌs mortgage counseling program has helped over 45,000 families to achieve the American Dream of homeownership. We have also helped hundreds of our homeowners to avoid foreclosure and keep their homes when they have fallen behind due to illness or other temporary financial hardships.

Our counseling program is certified by the United States Department of Housing and Urban Development and it is free of charge to participants. We do require clients to pay a $20 credit report fee, which covers our costs for pulling up to 2 triple merged credit reports per household.

To enter our program, call the ACORN Housing office in your city and tell them that you want to reserve a space at the next housing counseling intake workshop.

[Click here to find an office near YOU!]