Requirements for Homebuyers
OFS builds its homes to be affordable to low- and moderate-income homebuyers. To achieve this goal, OFS receives funding from the Community Development Block Grant (CDBG) program operated by the City of Madison and by Dane County. To be eligible to purchase an OFS home, a buyer must meet the following requirements:

1. You cannot own other real estate. If you already own a home, you must sell it as a condition of buying an OFS home.
2. You must intend to be an owner-occupant of the home and must take ocupancy within 60 days of buying the property.
3. You must be a documented US citizen or eligible alien.
4. If you have not owned a home in the past 3 years, you must complete an approved homebuyer education course prior to purchase. If you have already taken a homebuyer education class, your certificate must be dated no more than 18 months prior to receipt of the loan.
5. Your income, combined with that of all adults who will live in the home, can be no more than 80% of the median income for Dane County. Counted sources of income include wages, overtime, commissions, bonuses, profit sharing, tips, business income, child support, interest and dividends (from funds retained after closing), and other types of periodic payments anticipated for the 12 month period beginning with the date of your application.
6. See chart below for the current income limits. These limits are updated annually, usually in March of each year:

Income Limits adjusted for Household Size:

• Household of 1 - $44,800
• Household of 2 - $51,200
• Household of 3 - $57,600
• Household of 4 - $64,000
• Household of 5 - $69,150
• Household of 6 - $74,250
• Household of 7 - $79,400
• Household of 8 - $84,500

In addition, the following income, debt, and asset restrictions apply:

1. The homebuyer's total debt to income ratio cannot exceed 36% of income. This amount includes mortgage payment, all consumer debt, and any school loans. This ratio may be expanded to 40% if the buyer has a good savings history, excellent credit history, history of comparable rent expense, and stable employment.
2. To qualify for the maximum available in homebuyer assistance, the homebuyer must pay at least 30% of gross income towards their principle, interest, taxes, and insurance payment (PITI). On a case-by-case basis, loan applications with a combined ratio below 30% may be approved.
3. The maximum amount of "liquid assets" the homebuyer can have in reserves after closing cannot exceed $15,000 or the equivalent of 12 months of PITI (principle, interest, taxes, and insurance), whichever is greater. "Liquid assets" include such things as checking accounts, savings accounts, life insurance net cash value, stocks, bonds, mutual funds, money market funds and annuities, etc. Excluded are such things as IRA's, 401K plans, pension profit sharing, other pensions, employee retirement funds, assets not accessible to an applicant, and personal property including a primary automobile.

To read the City of Madison CDBG Underwriting Guidelines for "pass-through" loans, click here. Please take note of the following matters:

• These guidelines apply to OFS homes located in the City of Madison. OFS homes located in other Dane County communities have similar second mortgage assistance. However, Dane County's guidelines are not exactly the same in every respect.
• These City of Madison guidelines apply to all Madison CDBG homeownership programs. Not all of the information applies to the "pass through" mortgage assistance used by OFS.
• If you have questions about these issues, please contact Judy Olson at OFS (608-244-4721).