Welcome Home Program

Welcome Home Logo

This is only a brief overview of the Welcome Home program.  Complete details, limits, requirements, and guidelines are contained in the 2009 AHP Implementation Plan, Attachment H, and in the 2009 Welcome Home Guide.  A more complete program description and both documents are available on the Welcome Home Documents and Forms section   


The Federal Home Loan Bank of Cincinnati has established a set-aside of Affordable Housing Program (AHP) funds to help create homeownership.  These funds are available to Members as grants to assist homebuyers under the Welcome Home Program. This is a general description of the program.  Click here for complete information and documents.

Uses of Funds

Welcome Home funds may be used by Members to fund reasonable downpayments and closing costs incurred in conjunction with the acquisition/new construction of owner-occupied housing to be used as primary residences by low- and moderate-income homebuyers.   Members may use amounts up to a maximum of $5,000 per homebuyer, based on documented need.  A portion of the funds awarded may be used to pay for the reasonable costs of counseling (not to exceed $300) for homebuyers purchasing Welcome Home assisted housing if the cost is not covered by another funding source.   Welcome Home funds may not be used for any other purposes (for example, to pay off consumer debt, buy down the mortgage rate, etc.).

Funds Available for 2009

For 2009, at least thirty-five percent (35%) of the funds accrued for the Affordable Housing Program will be available for Welcome Home and the Mortgage Refinancing Assistance Program, with one-half of the funds for each program.  Funds will be reserved for Members and homebuyers on a “first-come, first-served” basis, but only to the extent that funds are available.  Once all funds have been reserved, the FHLBank will accept no additional requests to reserve funds

Member Limits

Within the availability of funds, all Members are eligible to receive a maximum of $200,000 of Welcome Home funds per year. 

Schedule for 2009 Welcome Home

Welcome Home funds will be available for reservation beginning on May 1, 2009, and will remain available until all funds have been reserved.  Any Reservation Requests received before that date will be denied.

Minimum Eligibility Requirements

In order to receive Welcome Home funding, the following eligibility requirements must be met:

  • Funds may be used only to assist households whose incomes are at or below 80% of Mortgage Revenue Bond (MRB) income limits, as adopted by the appropriate state housing finance agency, adjusted for family size.  Click here for MRB limits for KY, OH, and TN.
  • The Member who reserves the Welcome Home funds must originate and close the first mortgage in their name.
  • Homebuyers must contribute at least $500 of their own funds toward down payment and closing costs (60% of these funds may be received as a gift).  This requirement is waived if the homebuyer is disabled (additional documentation may be required).
  • The rate of interest, points, fees, and any other charges must not exceed a reasonable market rate for a loan of similar maturity, terms, and risk. 
  • The interest rate on the first mortgage (or the fully indexed rate for an adjustable rate loan) may not exceed 8.75%.  Any loans with rates higher than 8.75% are not eligible for Welcome Home funds.  
  • The APR cannot be more than .50% higher than the loan rate, except for FHA, VA, and RHS loans for which the APR cannot exceed the loan rate by more than 0.65%.  Any loans with APRs higher than those stated are not eligible for Welcome Home funds.
  • All fixed rate loans must have a minimum term of 10 years.  All Adjustable Rate Mortgage (ARM) loans must have a minimum term of 20 years.
  • Welcome Home first mortgage loans must comply with applicable federal, state and local anti-predatory lending laws, regulations and orders designed to prevent or regulate abusive and deceptive lending practices and loan terms (collectively, “Anti-Predatory Lending  Laws”). For example, Anti-Predatory Lending Laws may prohibit or limit certain practices and characteristics, including, but not limited to the following:

    • Requiring the borrower to obtain prepaid, single-premium credit life, credit disability, credit unemployment, or other similar credit insurance;
    • Requiring mandatory arbitration provisions with respect to dispute resolution in the loan document; or
    • Charging prepayment penalties for the payoff of the loan beyond the early years of such loan.
  • Any transaction including a loan that does not comply with all applicable Anti-Predatory Lending Laws will be ineligible for Welcome Home assistance.
  • Members are responsible for avoiding all unlawful practices and terms prohibited by applicable Anti-Predatory Lending Laws for loans originated in connection with Welcome Home.
  • The Bank will not provide Welcome Home assistance to any transaction in which a loan exceeds the annual percentage rate, or points and fees thresholds of the Home Ownership and Equity Protection Act of 1994 and its implementing regulations (Federal Reserve Board Regulation Z). 
  • The transaction may not include single-premium credit life insurance.  If the HUD-1 Settlement Statement shows a charge for single-premium credit life insurance, no Welcome Home funds will be disbursed.
  • Interest only loans are not eligible for Welcome Home.  Adjustable rate mortgages should be underwritten at their fully indexed rates and must have a minimum term of 20 years.  The fully indexed rate means the index at the time of loan origination plus the stated margin.
  • First-time homebuyers must complete a homebuyer counseling program.  The counseling program must be provided by, or based on one provided by, an organization recognized as experienced in homeownership counseling.  The counseling program must cover, at minimum, mortgage financing, credit-worthiness, household budgeting, and home maintenance.  Welcome Home funds cannot be used to pay more than $300 for costs related to counseling.  Counseling is not required of other homebuyers.
  • The housing assisted with Welcome Home funds must be subject to a legally enforceable restriction in the warranty deed or restrictive covenant to the warranty deed requiring that the Federal Home Loan Bank of Cincinnati be given notice of any refinancing, sale, foreclosure, or change in ownership of the unit prior to the end of a five-year retention period.  Homebuyers may also be required to pay back a pro rata amount of the Welcome Home grant if the home is sold or refinanced during the five-year retention period.  The specific “retention” language required is available on the Welcome Home Documents and Forms section.

Other Specific Requirements

  • Funds must be drawn down and used to assist the homebuyer in purchasing the specific home by December 1, 2009.
  • Welcome Home funds may be used in conjunction with other local, state, and federal funding sources and with the FHLBank’s Community Investment Program.  However, Welcome Home funds may not be used with an existing or future award through any of the FHLBank’s competitive or homeownership set-aside Affordable Housing Program or with 2007 or later American Dream Homeownership Challenge awards.
  • If Welcome Home funds have been disbursed to the Member and the funds are misused, or if the housing is sold or refinanced during the five-year retention period,  the FHLBank may recapture all or a portion of the funds pursuant to the retention language in the warranty deed. 
  • If the homebuyer receives any cash back at closing, as indicated on the HUD-1 Settlement Statement, the Welcome Home grant will be reduced by a like amount.  In lieu of receiving cash back at closing, any excess Welcome Home funds may be used as “principal repayment” or “principal reduction” and must be shown on the HUD-1 as such.
  • If the HUD-1 Settlement Statement indicates funds used for an ineligible purpose, e.g. paying off consumer debt, those amounts must be paid from the borrower’s funds, in addition to the $500 required.   If the borrower’s funds are not sufficient to cover these costs, the Welcome Home grant will be reduced by a like amount.
  • If the origination fee is greater than one percent (1%), or if discount points charged are greater than one-half of one percent (0.5%), those amounts, above the limit,  must be paid from the borrower’s (or seller’s) funds, in addition to the $500 required.   If the borrower’s funds are not sufficient to cover these costs, the Welcome Home grant will be reduced by a like amount.
  • Welcome Home is not intended for purchases requiring any significant repair or rehabilitation.  If more than $500 is to be escrowed for repairs, the property is not eligible for Welcome Home without the advance written approval of the FHLBank prior to closing.  The FHLBank will not approve purchases requiring any significant repair or rehabilitation, as evidenced by the appraisal.  If any funds are escrowed for repairs, the funds must come either from the seller or from the buyer’s own funds, in addition to the $500 required.  Welcome Home funds will not be disbursed until the Member certifies that: 1) all repairs were required for mortgage approval as evidence by the appraisal; 2) all repairs have been completed; and 3) all escrowed funds have either been disbursed or released.  If unused escrowed funds are released to the homebuyer, the Welcome Home grant funds will be reduced by a like amount.
  • Welcome Home may be used for new construction.  However, the home must be complete and the permanent financing closed before December 1, 2009. 
  • Some manufactured housing is eligible for Welcome Home assistance.  For eligibility for Welcome Home, “manufactured housing” is defined as a dwelling that is built on a permanent chassis and installed on a FHA Title II permanent foundation system; the definition includes only multi-section homes with a minimum 24-foot width.  Also, the home and the lot must be taxable together as real property.  Welcome Home funds may not be used for any other type of manufactured or mobile homes.
  • Welcome Home funds are intended only for homebuyers who would qualify for the first mortgage based on their current income.  Co-signors and co-borrowers are not allowed unless they will occupy the home as their primary residence and their incomes are included in determining eligibility.
  • Click here for full program definitions and requirements.

Reserving Welcome Home Funds

Funds will be allocated on a “first-come, first-served” basis.  Members are not guaranteed any specific amount of Welcome Home funds.  Funds will be reserved only for specific homebuyers purchasing specific homes and reservations cannot be transferred to other homebuyers or to other homes.  To request that funds be reserved for a homebuyer, the Member must have a Funds Transfer Agreement in place, submit a Reservation Request, certify that the homebuyer has a contract to purchase a home, and provide copies of the following documents:

  1. A completed, signed, and dated loan application;
  2. Third party documentation for all sources of current year income for all persons who will reside in the home.  (see definitions);
  3. An executed Good Faith Estimate; and
  4. An executed Truth-in-Lending statement.

The FHLBank will perform a preliminary review of the Reservation Request and the documentation submitted to determine eligibility of the homebuyer, availability of funds in the program, and availability of funds for the Member.  If any of the information is incomplete, additional documentation or information may be required.  Written notification will be provided to the Member as to the homebuyer’s eligibility and date the reservation will expire, if appropriate.  Submission of the Reservation Request does not constitute a reservation of funds; funds are reserved only upon written notification from the FHLBank. 

Disbursing Funds

Welcome Home funds will be disbursed after closing upon receipt of the following additional information:

  1. A Funding Request and Certification;
  2. An executed HUD-1 Settlement Statement, showing the Welcome Home amount;
  3. An executed final Truth-in-Lending statement; and
  4. The Warranty Deed containing the Welcome Home five-year retention language (available at on the Welcome Home Documents and Forms page).

Funds will be disbursed only to the extent they are required to fill the gap for downpayment, closing costs, and counseling fees.

Processing Times

Because of the heavy demand for Welcome Home funds, it may take up to four weeks to process a Reservation Request.  Until the Reservation Request has been approved, no funds have been reserved.  Funds must be reserved prior to closing.  If the loan closes prior to receiving a reservation, the FHLBank will not provide the Welcome Home funds.

Requests for funding may also take up to four weeks to process.

The FHLBank will make every effort to process requests as quickly as possible and will notify Members if processing times will likely exceed the estimates above.

Technical Assistance

For information or assistance, please contact the Housing and Community Investment Department toll free at (888) 345-2246, or
Damon Allen, Vice President, Director,  allendv@fhlbcin.com, (513) 852-7518 or Jill A. Cravens, Housing Team Leader, cravensja@fhlbcin.com, (513) 852-7550.

Fax Number: Reservation Requests and Funding Requests may be faxed to: 513 852-7648. (See Instructions for submitting Welcome Home requests by fax found in the Welcome Home Documents and Forms section.)

Email Address:   Reservation Requests and Funding Requests may be emailed to welcomehome@fhlbcin.com.  (See Instructions for submitting Welcome Home requests by email found in the Welcome Home Documents and Forms section.)

Mailing Address:  Reservation Requests and Funding Requests may be mailed to:

Welcome Home Program
Attn:  Jill A. Cravens
Federal Home Loan Bank of Cincinnati
Welcome Home Program
P.O. Box 598
Cincinnati, OH 45201-0598