FAQs • Is this actually a grant or a loan?

Is this actually a grant or a loan?: The funds are provided in the form of a forgivable loan. As long as borrowers comply with the terms and conditions of the program, their loan balance will be forgiven at 20% or $2,000 each year for five years. Borrowers will receive a 1099-form annually from the county for the forgiven amount as it is considered taxable income.

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Health & Human Services - PEG Lenders Eligibility

Your clients are eligible to apply for the Public Employee Homeownership Grant (PEG) Program if they meet all of the following qualifiers:

Able to contribute at least $1,000 of their own money towards down payment / closing costs.
Applicants who have been full or part-time employees (minimum 20 hours per week) of Loudoun County government, Courts and Constitutional Officers, or Loudoun County Public Schools for a minimum of 12 months (Temporary, seasonal and probationary employees are ineligible).
Applicants who are either first-time homebuyers or buyers who own property outside Loudoun County which will be sold prior to settlement...this also includes undeveloped land and inherited real estate, whether or not the property was occupied as their primary residence).
Applicants who have not been a resident of Loudoun County in the last 12 months...first-time homebuyers are exempt from the 12-month requirement (Proof of residency will be required)
Gross Annual Household Income between $45,650 - $106,500.
Middle credit score of at least 620.

2. What are the terms of the loan?: The loan is secured by a second lien on the home for a 5-year term at 0.00%. The maximum loan amount is $10,000. As long as the borrower maintains employment with the county or Loudoun County Public Schools (LCPS), keep the home as their primary residence and do not sell their home for a period of 5 years, the entire loan balance will be forgiven.

3. Is this actually a grant or a loan?: The funds are provided in the form of a forgivable loan. As long as borrowers comply with the terms and conditions of the program, their loan balance will be forgiven at 20% or $2,000 each year for five years. Borrowers will receive a 1099-form annually from the county for the forgiven amount as it is considered taxable income.

4. My client’s debt-to-income ratios are higher than the listed maximums. Why are you looking at debt-to-income ratios if the funds are a grant and not a traditional loan?: It is in the best interest of both the borrower(s) and the county to avoid causing undue financial burden for the homeowner as a result of the acceptance of the loan in the case that repayment should be required. Therefore, the county will consider the borrower’s existing debt along with the new mortgage payment by reviewing debt-to-income (DTI) ratios at the time of application.