Amortization period means the number of years required to repay a loan in full.

Closing costs are charges and expenses over and above the price of the property incurred by the buyer when transferring ownership of the property. Typical closing costs include fees for: property inspection, loan origination, rate discount, appraisal, credit report, mortgage insurance application, document preparation, attorney services, judgment search, abstracting, recording; title insurance (for mortgagor or owner); local taxes; survey, plat drawing; pre-paid interest for up to 30 days; initial insurance premiums; escrows of condo or homeowners association dues, transfer taxes, property taxes, flood insurance, and homeowner’s insurance.

County means a geographic subdivision of a state or federal territory, usually assigned some governmental authority. Parishes and boroughs are called “county-equivalents" by the HUD, as are certain independent cities that are not parts of counties.

Deed in lieu of foreclosure means a deed instrument in which a borrower conveys all interest in a property to the lender to satisfy a loan that is in default to avoid foreclosure proceedings. For purposes of the WHP retention requirements, transfer of a property through a deed in lieu of foreclosure will be treated as though the property had been foreclosed.

Direct grant or grant means provision of funds for a project with no requirement for repayment so long as the funds are used for the purposes intended for the time period required.

Down payment assistance means grants or loans used to reduce the first mortgage amount to the borrower.

First-time homebuyer means an individual or household who has not owned a home during the three-year period prior to the purchase of a home, except that:

1. Any individual who is a displaced homemaker may not be excluded from consideration as a first-time homebuyer on the basis that the individual, while a homemaker, owned a home with his or her spouse or resided in a home owned by the spouse;
2. Any individual who is a single parent may not be excluded from consideration as a first-time homebuyer on the basis that the individual, while married, owned a home with his or her spouse or resided in a home owned by the spouse; or,
3. Any individual or family who owns a home that: (a) is not intended as a dwelling; OR (b) is a Mobile home that was not originally assembled to meet nationally recognized standards or is not permanently affixed to a foundation that meets nationally recognized building code standards; OR (c) is not in compliance with state, local, or model building codes and cannot be brought into compliance for less than the cost of constructing a permanent structure.

Foreclosure means a legal procedure by which mortgaged property is sold, upon default, in order to satisfy a debt. Foreclosures generally are governed by state law, and rules may vary between states. For purposes of the WHP retention requirements, transfer of a property through a deed in lieu of foreclosure will be treated as though the property had been foreclosed.

Fully-indexed interest rate in the Welcome Home Program means, on an adjustable-rate loan, the rate determined by adding the margin to an index level at the time the loan is made. The interest rate on an adjustable (sometimes known as variable) rate loan is tied to a benchmark interest rate, known as an “index.” (Popular indexes for loans are the prime rate, LIBOR, and various U.S. Treasury bill and note rates.) The index level varies according to market conditions, but the margin is usually a constant value. The “margin” is the mark-up over the index that the lender imposes. The initial interest rate, sometimes called a “teaser” rate, might actually be less than the index at the time the loan is made and is always less than the fully indexed rate (index plus margin).

Example: The fully indexed interest rate on an adjustable rate mortgage tied to the one-year LIBOR rate (the index) with a margin of 3.75 percent would be 5.75 percent if the LIBOR index was 2.00 percent at the time the loan was made.

The fully indexed rate is not affected by any annual or lifetime caps on adjustments based on the index. Instead, it reflects what the interest rate would have been at the time the mortgage was made based solely on the index at that time and the stated margin.

Fully indexed rate = Index (at the time the loan is made) + Margin (established at the time the loan is made).

Note: the “fully-indexed interest rate” is not the same as the “fully-indexed rate at maturity.” The fully indexed rate at maturity is based on the index at the time the loan is originated plus the maximum amount the interest rate could increase over the life of the loan. It is a worst-case calculation.

Household means all the people who currently occupy an existing housing “Unit” or will occupy a housing “Unit” or “Bed” being developed, including related family members and all unrelated people that reside in the unit, including unborn children and adoptive children, lodgers, foster children, wards, or employees who share the housing.

Household income means the combined annual earned and unearned “Income” of all the occupants aged 18 and over in a given dwelling unit at the time the household is qualified by the Member at time of loan application. Generally, current circumstances will be used to anticipate “Income” and projected annual income will be calculated by annualizing current “Income” taking into account changes expected to occur during the year. “Household income” is determined using the Income Calculation Guide available at www.fhlbcin.com.

Household's investment means the following, to the extent paid by the household and documented to the Bank:

1. Reasonable and customary costs paid by the household in connection with the purchase of the unit (including real estate broker’s commission, attorney’s fees, and title search fees); 
2. Any down payment paid in connection with the household’s purchase of the unit; 
3. The cost of any capital improvements made after the household’s purchase of the unit until the time of the subsequent sale, transfer, assignment of title or deed, or refinancing; and
4. The amount of principal on any mortgage senior to the AHP subsidy lien or other legally enforceable AHP subsidy repayment obligation repaid by the household.

Income means:

1. The full amount, before payroll deductions, of wages and salaries, overtime pay, commissions, fees, tips and bonuses, and other compensation for personal services; and
2. The net income from operation of a partnership, business, or profession; and
3. Interest, dividends etc.; and
4. Payments in lieu of earnings, such as unemployment benefits, disability compensation, worker’s compensation, and severance pay; and
5. The full amount of periodic payments from Social Security, annuities, insurance policies, retirement funds, pensions, disability or death benefits, lotteries, trusts, and inheritances, and other similar types of periodic payments received; and
6. All regular pay, special pay, and allowances of a Member of the Armed Forces; and
7. Income from assets (if generating regular payments to the household); and
8. Regular contributions and gifts (monetary or not) from persons outside the household; and
9. Alimony, child support, etc.; and
10. For 2-4 unit dwellings, 85 percent of the projected gross income for such units.

Manufactured housing refers to a single-family residential dwelling built in compliance with the Federal Manufactured Housing and Construction Standards, as amended, also known as the HUD Code, after June 15, 1976.  Manufactured homes may be built in multi-sectional or single section units and installed on an FHA Title II permanent foundation system. In addition, the home and the lot must be taxable together as real property. For WHP eligibility purposes, a single section manufactured home must be Energy Star rated.

Maximum interest rate for the Welcome Home Program means the rate established pursuant to Part VII C (3) of the AHP Implementation Plan.

Member means a Member stockholder of the Federal Home Loan Bank of Cincinnati, which has full borrowing and voting rights and privileges. Members include commercial banks, savings and loan associations, savings banks, credit unions, insurance companies, and community development financial institutions.

Mobile Home refers to a residential structure manufactured prior to the enactment of the Federal Manufactured Housing and Construction Standards, also known as the HUD Code, on June 15, 1976. Mobile homes are not eligible for the WHP grant.

Modular Home refers to a home built to the State or Local Code where the home will be located. Sectional units are built in a production facility, transported to the site, and assembled onsite.

Net proceeds means:

1. In the case of a sale, transfer, or assignment of title or deed of an AHP-assisted unit by a household during the AHP five-year retention period, the sales price minus reasonable and customary costs paid by the household in connection with the transaction (including real estate broker’s commission, attorney’s fees, and title search fees) and outstanding debt superior to the AHP subsidy lien or other legally enforceable AHP subsidy repayment obligation;
2. In the case of a refinancing of an AHP-assisted unit by a household during the AHP five-year retention period, the principal amount of the new mortgage minus reasonable and customary costs paid by the household in connection with the transaction (including attorney’s fees and title search fees) and the principal amount of the refinanced mortgage.

Ownership means a fee simple interest in a property to be used as a primary residence. Owner-occupied units may include single-family detached units, condominiums, townhomes, duplexes, triplexes, or quadplexes. Ownership properties also include those in which there is a true ownership through a cooperative.

Permanent loan means a repayable, amortizing loan, with a loan term of at least 10 years to the homebuyer.

Real Estate Owned (REO) means property taken by the lender as the final step in the foreclosure process. The property ownership has been conveyed back to the lender.

Rehabilitation Act is codified at 29 USC 791.

Retention period means:  Five (5) years from the date of the recording of the deed for a WHP-assisted owner-occupied unit.

Third-party income documentation is provided by an independent source to verify an individual’s income, such as wage statements, interest statements, and unemployment compensation statements. Examples of third-party sources include employers, the Social Security Administration, and the IRS.

Note: The Welcome Home Program description, related documents, and the Members Only on-line forms may contain other terms or phrases not defined here. These terms or phrases may be associated with descriptions or definitions appropriate to the context in which they appear. These additional words and phrases and any descriptions and definitions appearing in the online forms or elsewhere are incorporated herein by reference. Slight variations in the wording of definitions may be required by the context in which terms appear, and these variations should not be construed as different definitions. Any questions about the definitions stated here, in the online application, or elsewhere should be addressed to the FHLB for resolution.