5.12 Home Purchase Assistance Program
Policy Number: 4-106
Policy Name: Home Purchase Assistance Program
Date: March 12, 1998
Revisions: September 7, 2001; May 25, 2005
The Board of Trustees has established a new program to replace the University's current mortgage program for faculty and professional staff hired after June 30, 1998. In so doing, it continues to assist in the recruitment and retention of faculty and administrators. This new program, called the Home Purchase Assistance (HPA) program, provides a one-time $5,000 payment to be paid at settlement on the purchase of a primary residence. Key elements of the HPA program are set forth below:
Effective July 1, 1998, all full-time faculty and professionals hired after June 30, 1998 may receive home purchase assistance in the form of a one-time $5,000 payment to be paid at settlement on the purchase of a primary residence within reasonable commuting distance of work location.
Full-time faculty and professional staff hired before July 1, 1998, who have not used the University mortgage program, will have the option of using the existing University mortgage program or the new HPA program, effective immediately.
The HPA supplemental cash payment will be taxable income to the employee in the year paid and federal and state taxes will be withheld as appropriate. The law requires federal (25 percent) and state (5 percent) income taxes be withheld irrespective of an employee's actual tax bracket. FICA/FICM tax of 7.65 percent must also be withheld unless the FICA threshold has been reached. The net cash available to employees will be $3,117.50. (If the home is purchased in the City of Wilmington, you will be subject to the city tax of $62.50 resulting in a check of $3,055.00).
If an employee itemizes deductions on his or her income tax return, mortgage points paid generally are deductible, and the employee can adjust withholding tax from regular salary to reflect estimated tax liability. Employees are encouraged to consult a tax advisor to determine the tax treatment appropriate to their individual circumstances.
No more than $5,000 shall be made available per home purchase, regardless of the number of eligible employees owning and residing in the home.
Full-time faculty and professional staff electing the HPA program may also take advantage of theNeighborhood Mortgage Assistance Program if he/she meets that program's qualification criteria.
Detailed administrative procedures are available with HPA application forms in the University Associate Treasurer's Office.
For additional information, contact the Associate Treasurer's Office (831-8964).
Submitted by: Office of the Treasurer