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Mortgage Insurance


Description


The Mortgage Insurance program is designed to increase the number of employee-owned and occupied residences within our neighborhood by making purchasing a home more affordable. Usually, when a bank lends more than 80% of the value of a home, they require private mortgage insurance (PMI) to guarantee repayment of the loan. The bank buys the insurance for you and includes the insurance premium in your monthly payment. PMI can cost $50 or more per month. Lancaster General Health will pre-purchase your private mortgage insurance, so you don't have to pay the premium. The Mortgage Insurance program criteria are:

  • The maximum purchase price is $200,000 or the prevailing conforming loan amount or the bank's appraised value, whichever is less.
  • Only one or two-family dwellings are eligible. Condominiums must be Fannie Mae approved. Dwellings must be located in the area defined by the attached map.
  • Employee may borrow up to 95% of the purchase price plus an additional 5% of the purchase price for closing costs.
  • The Lancaster General Health program is offered to eligible credit-worthy employees under an arrangement with a financial institution. An applicant for a loan under the program will be subject to credit verification and must satisfy the financial institution's criteria related to mortgage approval. The decision to grant the mortgage rests solely with the financial institution.
  • The home must be and remain employee's principal residence.
  • On behalf of employee, Lancaster General Health will obtain pre-paid private mortgage insurance (PMI) which will cover 80% of the mortgage amount as required by the lender.
  • For any mortgage obtained under this program, Lancaster General Health's guarantee will be revoked if:
    • the mortgagor ceases to be a fulltime employee (defined as a minimum of .8 FTE designation) Lancaster General Health
    • the employee ceases to occupy the property as his/her principal residence
    • the employee ceases to be the owner of the property
  • Changes in employment status, such as switching to part-time status, leave of absence, or retirement, will result in a default of the loan agreement.
  • The cost of the pre-paid PMI will be forgiven at 20% per annum over the first five years of home ownership. If Lancaster General's guarantee is revoked, the employee must remit the remaining unforgiven amount to Lancaster General Health.
  • If the employee ceases to be employed fulltime by Lancaster General Health, ceases to occupy the home as a principal residence, or ceases to own the home, it is the employee's responsibility to notify Lancaster General Health within 24 hours.
  • Applicable payroll taxes will be deducted from the employee's paychecks beginning one month after the settlement date. An estimated amount per paycheck will be provided for the employee.


Eligibility

  • Fulltime (defined as a minimum of .8 FTE designation) employees of Lancaster General Health.
  • Employment of a minimum of 90 days and employment in good standing.
  • The program applies only once, regardless of how many employees reside in the household.
  • Not available to employees who already own a home and reside in the established area.
  • Officials of Lancaster General Health and those individuals classified as "highly compensated" (by IRS definition) are not eligible for this program.


Procedure

  • The employee must complete the Lancaster General Health Home in the City Program Eligibility Form and submit it to the Lancaster General Health Home in the City Program Administrator. Forms can be obtained at Lancaster General Health’s Real Estate and Leasing office located at 607 N. Duke Street or by visiting the Lancaster General Health Intranet and clicking on Human Resources and then “Home in the City.”
  • The Home in the City Program Administrator will notify the employee of acceptance of eligibility.
  • Prior to beginning the search for a home, the employee should contact a representative from a financial institution which provides home mortgages and determines mortgage amount eligibility.
  • It is recommended that the employee interview several realtors, check references and then select a realtor to assist with the home search. First-time homebuyers must complete the workshop offered by the Lancaster Housing Opportunity Partnership (LHOP). To register for the workshop, visit the LHOP Web site at www.LHOP.org.
  • The employee should review the Lancaster General Health Home in the City Housing Program Agreement. Forms can be obtained at Lancaster General Health’s Real Estate and Leasing office located at 607 North Duke Street or by visiting the Lancaster General Health Intranet and clicking on Human Resources and then “Home in the City."
  • It is recommended that the employee receive verification from Lancaster General Health that the home qualifies for the program. The Program Administrator will confirm qualification to the employee and the financial institution.
  • Prior to signing an Agreement of Sale, Lancaster General Health recommends that the employee secure the services of an attorney knowledgeable in real estate matters.
  • Once the employee and the seller have an executed Agreement of Sale, the employee must send a copy of the signed Agreement of Sale to the Program Administrator.
  • The employee must contact and work with the financial institution to complete the mortgage application process.
  • Lancaster General Health will obtain verification directly from the financial institution when the mortgage has been approved, along with a copy of the HUD Settlement Estimate Sheet and the settlement date.
  • Prior to settlement, Lancaster General Health will again confirm eligibility.
  • The Program Administrator will contact the employee to schedule a pre- settlement conference.
  • The Program Administrator will provide the employee with the approved loan amount and an estimate of the payroll tax impact during the pre-settlement conference.
  • The employee will bring a signed original of the Lancaster General Health Home in the City Program Agreement to the pre-conference meeting.
  • Prior to settlement, Lancaster General Health will coordinate the purchase of PMI with the financial institution.
  • Prior to settlement, Lancaster General Health will wire transfer an amount equal to the PMI to the settlement agent.
  • After completion of the settlement, employee will send a copy of the Settlement Statement signed by the buyer and seller, to the Program Administrator.
  • Under no circumstances may the employee receive cash at settlement.


This information is intended only as a general review of Lancaster General Health's Home in the City programs. The mortgage will be governed by the detailed terms and conditions of the mortgage loan documents, including the note and mortgage, and the Lancaster General Health Home in the City Housing Program Agreement. If there is any inconsistency between this program's description and those documents, the terms and conditions of the note, the mortgage and the Lancaster General Health Home in the City Housing Program Agreement shall prevail.


This information is intended as a general overview only. The terms, conditions and procedures of the programs are subject to change at Lancaster General Health's discretion. Employees are urged to seek the advice of knowledgeable legal counsel when contemplating a real estate purchase.


Any questions regarding the Program may be directed to the Program Administrator at (717) 544-5231.