Henrico County is proud to offer the Employee Home Purchase Assistance Program (EHPAP)!
The purpose of this program is to provide homebuyer education and counseling to prepare first-time homebuyers for homeownership, as well as financial assistance to eligible County employees for the purchase of a home in Henrico County.
Program Overview
EHPAP provides a two-part HUD-certified homebuyer education course and six hours of individualized housing counseling at no cost to employees. Additionally, eligible employees may receive up to $25,000 in down payment and closing cost assistance, in the form of an interest-free forgivable loan, for the purchase of a home within Henrico County. To have the full loan amount forgiven, employees must: maintain full-time employment with the County and occupy the home as their primary residence for five years from the purchase date. If these conditions are not met, the employee will be obligated to repay any remaining unforgiven loan balance.
Eligibility Requirements
- Full-time permanent employee of Henrico County Government, Henrico County Public Schools, or a Henrico County constitutional officer (Sheriff’s Office, Commonwealth Attorney, etc.)
- Must have a minimum of 12 months of consecutive full-time service
- Performance appraisal rating must be “acceptable” or better at the time of application
- First-time homebuyer (may not currently own or have held any ownership interest in real estate within the last 5 years, including real estate in other states or countries)
- At least $1,000 of personal funds must be contributed to the purchase
- Credit score must be 600 or higher
- Outstanding judgments, collections, etc., may not total more than $1,000
- Bankruptcies must have been discharged for at least 2 years
- Foreclosures must be at least 5 years old
- Total household assets (cash, checking accounts, savings accounts, stocks, money market accounts, etc.) may not exceed the current program limit of $50,000. Please note that your primary vehicles and the value of your retirement accounts are excluded from your total household assets.
- The home being purchased must be located in Henrico County, VA
Income and Sales Price Limits
Gross household income and the sales price of the home must not exceed the limits established by Virginia Housing. Please note that household income must account for the income of ALL individuals aged 18 or older residing in the home, regardless of relationship or familial status. Household income must account for all sources of income such as salary/wages, child support, retirement, alimony, Social Security, etc.
- Gross household income may not exceed:
- $98,300 for 1-person households
- $148,400 for 2-person households
- $169,600 for households of 3 or more
- The sale price of the home may not exceed $550,000
Purchase Agreements
Employees should not have an executed purchase agreement or enter into a purchase agreement prior to participating in the program’s mandatory counseling. Employees who are under to contract to purchase a home at the time of application may not be eligible for the following reasons:
- Housing affordability
- Type of home and sales price limits
- Repairs and inspection considerations
- Processing time
- Availability of funds
Application Process and Program Requirements
- Submit a request for your initial employment eligibility verification through HRMS by completing the following steps:
- Log in to your HRMS account
- Click “Employee Direct Access” and then select “Document Approval App” from the main menu
- Click “Create Approval Request” in the top left corner
- Under *Category, choose “Employee Home Purchase Assistance Program”
- Under *Routing Type, choose “First Responder Wins”
- Under *Subject, type in “Request for EHPAP Eligibility”
- Click “Save Request” in the top left corner
- Click “Submit for Approval” at the top of the screen
- After Human Resources confirms you meet the initial employment eligibility criteria, follow the link in the eligibility verification email to complete a pre-screen. Save a copy of your HR eligibility verification as a PDF to attach to your pre-screen, as this PDF must be attached in order for your pre-screen to be processed.
- After you have completed the pre-screen and received a letter from the Department of Community Revitalization (DCR) stating that you meet the additional eligibility criteria, follow the steps in the letter and submit a program application and credit authorization to Henrico County’s third-party program administrator. Please allow up to 10 business days to receive a response
- Complete a 2-part mandatory homebuyer education course offered by the program administrator and submit financial documents for review
- Complete 6 hours of individualized counseling
After an employee has completed the application process and met all program requirements, a review committee will make a determination as to whether or not funds will be reserved for the employee’s closing. Applying to EHPAP and completing the above program requirements does not constitute approval for down payment and closing cost assistance or guarantee funds.
Employee Contribution
To participate in the program, employees are required to contribute a minimum of $1,000 of their own funds towards the purchase. These funds are often contributed in the form of an Earnest Money Deposit when entering into a purchase agreement, as well as the upfront cost of the mandatory home inspection. Please note that EHPAP funds may not be used for deposits or inspections. The total employee contribution may be higher and will depend on their household assets and the funds needed for closing.
Tax Implications and Changes to your Paystub
Down payment and closing cost assistance is considered taxable income, and employees are solely responsible for paying applicable federal and state income tax on the forgivable loan amount. After the forgivable loan is issued, the loan is forgiven at a rate of one one hundred and twentieth (1/120th) of the total for each pay period of continued full-time employment. This amount will be reflected on your paystub as “Imputed HC-EHPAP.” This is not a deduction, but is the amount used to calculate the taxes that will be withheld for a portion of the forgivable loan. This amount will appear on your paystub every pay period over the next 5 years following receipt of the assistance. Click HERE for more information and to view a sample paystub.
Employees should consult a tax professional to fully understand the implications associated with receiving an EHPAP forgivable loan from their employer.