51ÊÓƵ

The University of 51ÊÓƵ has established a multi-faceted program to aid Hill Section revitalization efforts by encouraging current and new members of the University faculty, staff and administration to live in a targeted area of the Hill Section.

For purposes of the program, the eligible area of the Hill Section is bounded on the east and west by Poplar Street and Ridge Row and on the north and south by Jefferson Avenue and Richter/Arthur Avenue.

What is the Employer-Assisted Housing Program?  The University of 51ÊÓƵ’s Employer-Assisted Housing Program is a two-part program that is intended to help revitalize 51ÊÓƵ’s Hill Section.  The program consists of University-owned properties that are available to faculty and staff for rent and a forgivable loan program to assist faculty and staff in purchasing a home in the eligible area of the Hill Section.

What employees are eligible?  All current and new full-time employees of the University who are not already living in the eligible area are eligible for the rental or forgivable loan programs.

Why is the University only limiting this program to the Hill Section?  The University is committed in a special way to helping to maintain and improve its immediate neighborhood – the Hill Section.  The University’s campus is intertwined in the neighborhood and the vitality of the Hill Section is important to the students, faculty and staff who live and/or work in it.

What University-owned properties are available for rent by faculty and staff?  All properties are available on a first-come, first-serve basis.

What properties in the Hill Section are available for support through the Forgivable Loan Program?  Only one or two-family homes and condominium units that are used as the employee’s primary residence are eligible.  In order to be eligible, properties must be located in the area of the Hill Section that is bounded on the east and west by Poplar Street and Ridge Row and on the north and south by Jefferson Avenue and Richter/Arthur Avenue.  Where a street boundary is indicated, both sides of the street are within the area.

How much support is available through the University’s Forgivable Loan Program?  The University has implemented a Forgivable Home Purchase Loan Program beginning in the 2002-2003 academic years.  Eligible employees can receive a loan of up to $5,000 that is forgiven over a three-year period.  Loans are available each year on a first-come, first-served basis.

How must I use the money?  Forgivable loans can be used to defray down payment, closing costs (home inspections, appraisals, etc.) or points on the purchase of a home.

How does the forgiveness work?  Assume that you purchase a home in the specific area of the Hill Section.  You would qualify for a forgivable loan of up to $5,000.  For example, assume that you close on the purchase of that home on 1 June and that you choose the full loan amount of $5,000.  This date (1 June) will be considered the anniversary date of your loan.  On 1 June of the first anniversary date the University will forgive $1,667 (one third) of your loan assuming that you fulfill all the conditions of the program.  On 1 June of the second anniversary date the University will forgive $1,667 with the remaining $1,666 forgiven on 1 June of the third anniversary date.

What must I do to have the loan forgiven?  The requirements are relatively few.  You must remain a full-time employee of the University for the three-year period during which your loan is forgiven.  You must continue to own the house and live in it as your primary residence.  You must sign an annual certification that acknowledges that you are in compliance with the conditions of the program.

When do I receive the Forgivable Loan?  Your check will be available to you at the time you close on your purchase.

What happens if I decide to sell the house within three years?  The amount of the loan that has not been forgiven will be due and payable upon the sale of the house. 

What happens if I no longer work for the University?  The amount of the loan that has not been forgiven will be due and payable at the conclusion of your service.

If I leave the University in the middle of the year, is loan forgiveness pro-rated?  Yes.  Loan forgiveness begins to be calculated on the first anniversary of your closing. Program does not begin until the conclusion of the first year of the loan, and will be prorated based on the anniversary date of your loan.

I currently own a house within the eligible area but want to move to another house within the eligible area.  Do I qualify for the program?  No

How many times may I receive a Forgivable Home Purchase Loan?  The Forgivable Home Purchase Loan is available once to an employee during employment at The University of 51ÊÓƵ.  If the employee leaves the University and then returns, the loan is still available only once to that employee.

How do I go about getting a Forgivable Home Purchase Loan?  The Vice President of Finance/Treasurer can tell you if you are eligible to apply.  If you are a first-time homebuyer, you can attend a free home buying seminar offered by Neighborhood Housing of 51ÊÓƵ.  You then need to purchase a house within the eligible area and submit an application with copies of a fully executed Property Purchase Contract and completed Mortgage Lender Application.  You then need to await formal notification from the Vice President of Finance/Treasurer that you have qualified.

How do I apply for a forgivable loan?  Forgivable Home Purchase Loan Applications are available through the General Counsel’s Office.   A completed application also requires that you attach a copy of a fully executed Property Purchase Contract and completed Mortgage Lender Application.

What if I am only just starting to look for a home and mortgage?  If you are just starting to look for a home in the eligible area, you can request a Conditional Reservation for one of the Forgivable Home Purchase Loans that are available each year.  If approved, you can use a Conditional Reservation with lenders to certify that down payment support is available through a Forgivable Home Purchase Loan.  Conditional Reservations expire 90 days after the initial approval.  If your search is successful and you enter into a Property Purchase Contact for an eligible property, you will then need to complete and submit a Forgivable Home Purchase Loan Application, attaching a copy of your Mortgage Lender Application.  Conditional Reservation Forms are available through the General Counsel’s Office. 

Is the forgivable loan taxable to me?  Yes, but not until the loan is actually forgiven.  Using the example above, if you chose a loan of $5,000 that begins on 1 June, on 1 June of the first anniversary date $1,667 (one third) is forgiven.  That $1,667 will appear as income to you on the W-2 you receive from the University for that year.  It is subject to FICA and all other withholding taxes.  The same would hold true for the $1,667 that would be forgiven on the second anniversary date and the remaining $1,666 that would be forgiven on the third anniversary date.

1. Description: Beginning in the 2002-2003 academic year, the University embarked on a program to offer employees a Forgivable Home Purchase Loan. Loans are offered to employees on a first-come, first-served basis.

2. Eligibility: All current and new full-time employees of the University who do not own a home in the eligible area.

3. Forgivable Loan Amount: Eligible employees can receive a forgivable loan of up to $5,000 that can be used to defray down payment, closing costs (home inspections, appraisals, etc.) or points on the purchase of a home in the eligible area of the Hill Section as defined above. The entire loan is provided to the employee at the time of purchase.

4. Loan Forgiveness/Tax Consequences: The University will forgive one-third of the loan each year over a three-year period. Employees who leave University service prior to the conclusion of the three-year period are responsible for reimbursing the University for any remaining loan funds (prorated for partial years of service). NOTE: The employee is responsible for all tax consequences of the forgivable loan.

   For example, assume that the employee closes on the purchase of a home in the eligible area on 1 June and that he/she chooses the full loan amount of $5,000. This date (1 June) will be considered the anniversary date of the forgivable loan. On 1 June of the first anniversary date the University will forgive $1,667 (one-third) of the loan assuming that the employee fulfills all the conditions of the program. That $1,667 will appear as income to the employee on the W-2 he/she receives from the University for that year. It is subject to FICA and all other withholding taxes. The University will forgive $1,667 on 1 June of the second anniversary date and the remaining $1,666 on 1 June of the third anniversary date. These would appear on the employee's W-2 form for each respective year.

5. Application Procedures: The Forgivable Home Purchase Loan Application is available through the General Counsel's Office, 51ÊÓƵ Hall, 570-941-6213. A completed application also requires that you attach a copy of a fully executed Property Purchase Contract and completed Mortgage Lender Application.

6. Conditional Reservation: Employees who are just starting to look for a home in the eligible area can request a Conditional Reservation for one of the Forgivable Home Purchase Loans that are available each year. If approved, employees can use a Conditional Reservation with lenders to certify that down payment support is available through a Forgivable Home Purchase Loan. Conditional Reservations expire 90 days after the initial approval. Employees must still complete and submit a Forgivable Home Purchase Loan Application with all necessary attachments. Conditional Reservation Forms are available through the General Counsel's Office 51ÊÓƵ Hall, 570-941-6213.

can provide information about the variety of programs available to assist homebuyers of low or moderate incomes. You can find out more about these programs and their eligibility requirements by calling 570-558-2490.

For more information about the Employer-Assisted Housing Program, contact Laura Carroll, Legal Assistant (570-941-6213) or laura.carroll@scranton.edu