FAQ’s

Table of Contents

ABOUT VI SLICE

What is the VI Slice Moderate-Income Homeownership Program (“VI Slice”)?
  • VI Slice is a new program that establishes secondary gap financing for first-time eligible moderate-income households purchasing or constructing a home.
  • This program is designed to establish opportunities which may increase homeownership rates amongst moderate-income households here in the U.S. Virgin Islands. Applicant must be a first-time homeowner.
  • The program will also support long-term sustainability, resiliency, and economic viability across the territory by providing financial assistance to expand affordable homeownership opportunities.
What exactly is Gap Financing?
  • Gap financing assistance will provide supplemental funding to clients in an effort of bridging the “Gap” between the overall project cost and the amount secured through a primary lender.
What is the maximum amount I can receive from VI Slice Gap Financing?
  • VI Slice Program (Aggregate): $200,000
  • Maximum Amount Down Payment and Closing Cost: $100,000
Who is this program for?
  • This program is for moderate-income households who qualify for a mortgage, will be first-time homeowners, and will reside in the USVI (specifically in the home that will be financed through the VI Slice program) for at least 10 years.
What is a first-time homeowner?
  • A first-time homeowner is defined as an individual who has had no ownership in a principal residence during the 3-year period ending on the date of purchase/construction of the property.
What do I need to do to apply for this program? And how does this program work?
  1. Complete VIHFA’s Homebuyer Education Program and earn a Homebuyer Education Certificate of Completion.
  2. Find a home to purchase or have a home construction project to finance.
  3. Go to a participating bank or mortgage company (“financing entity)”to apply for a – mortgage on the home or home construction project.
  4. The financing entity will then qualify you for a specific amount.
  5. If you qualify, but experience a shortfall in the down payment or project cost, the financing entity will refer your mortgage application package to the VIEDA.
  6. The VIEDA will review the financing entity’s documents for program eligibility and approval of “gap” amount.
  7. If approved, the financing entity will approve its mortgage amount with the “gap” financing amount from the VIEDA and place a first mortgage lien on the property for its loan amount at closing.
  8. A soft second mortgage will be placed for the VIEDA’s ‘gap’ amount on the property at closing.
  9. The VIEDA second mortgage for the ‘gap’ amount will turn into a grant, and be released after 10 years providing the mortgagee(s) maintained the property as their primary residence for the 10-year period.
  10. There is no payment on the gap amount financed providing the mortgagee(s) maintained the property as their primary residence for the 10-year period.
  11. The property must be occupied by the homeowner and remain as the homeowner’s primary residence for a minimum period of ten (10) years. If the homeowner does not occupy the property for the full 10-year period, the gap amount would have to be repaid by the homeowner.

Example: If you have a shortfall of $20,000 (gap amount) for the down payment on a home, the financing entity will refer your mortgage loan application package for the VIEDA’s review and approval of the gap amount. If approved, the VIEDA will provide the $20,000 gap amount to the financing entity at closing to complete the mortgage transaction.

Who is involved in this program?
  • V.I. Slice was started through a collaboration with the Office of the Governor, Office of Disaster Recovery, and the Virgin Islands Economic Development Authority in partnership with local banking institutions and mortgage companies. Funding for this program derives from the American Rescue Plan Act (ARPA).
When did this program start?
  • This program was launched on October 20, 2022.
Is there a deadline to apply for this program?
  • Deadline to be determined based on availability of funds.
How long will this program last?
  • VI Slice will last until funding is depleted.
How is this program different than the Virgin Islands Housing Finance Authority (“VIHFA”) homeownership program?
  • VIHFA program is for low-income homeowners, whereas VI Slice is for moderate income homeowners. VI Slice also allows for the inclusion of up to two (2) rental units with the primary residence. Further, VI Slice residency requirements are different than the VIHFA residency requirements.

PROGRAM USES

How can this program help me own a home and what can I use the program’s funds for?
  • With VI Slice, you can use the funds to buy a home (and rehabilitate a home, if required), to construct a home on land owned or purchased, or to pay towards the down payment and/or closing cost.
Will the program allow for the purchase of a damaged house and include reconstruction of same?
  • Yes. This program allows for the purchase of a home and its renovation or reconstruction of a home from the ground up.
Can I have a rental unit?
Can this program be used for an Airbnb or vacation/short-term rentals?
  • No, the program prohibits the use of rental units as vacation or short-term rental units. All lease terms must be for a period of twelve (12) months or longer in duration.
Can I live in the home less than 10 years, then relocate and rent out the home?
  • The property must be occupied by the homeowner and remain as the homeowner’s primary residence for a minimum period of ten (10) years.
  • If the homeowner does not occupy the property for the full 10-year period, the gap amount would have to be repaid by the homeowner.

ELIGIBILITY

Who is eligible to apply for this program?
  • To be eligible, each household must have the following moderate income levels on each island:

    Island

    Minimum Household Income:

    Maximum Household Income:

    St. Croix

    $43,501

    $216,300

    St. John

    $47,151

    $260,750

    St. Thomas

    $45,298

    $242,900

Applicants must also:

  • Be a first-time home buyer.
  • Be a resident of the territory for the last three (3) years prior to the signing of a sales contract, with the exception of those applicants who were prior residents of the territory for at least 10 years and have now opted to return, or whose birthplace is the U.S. Virgin Islands.
  • Must attain a commitment letter for a mortgage loan based on underwriting standards of the primary financing lender.
  • Applicant must have the ability to make a minimum earnest money deposit of $5,000.00 at the time of signing the purchase contract. For Veterans holding a certificate of eligibility or an honorable discharge via the DD214, no earnest money deposit is required.
  • Must complete VIHFA’s Homebuyer Education Program and earn a Homebuyer Education Certificate of Completion. (Co-borrowers on the application must also complete the home buyer education program and earn that certificate of completion).
  • Must have a minimum credit score of 620 or conform to the required credit score of the primary lender.
  • Applicant must have the ability to make additional investment into the mortgage transaction in an amount to be determined by the primary lender
Can veterans and active military personnel apply for this program?
  • Yes. Active military personnel must have the ability to make a minimum earnest money deposit of $5,000.
  • However, for Veterans holding a certificate of eligibility or an honorable discharge via the DD214, no earnest money deposit is required.
If you are approved from a non-VI banking institution, would this gap financing be available?
  • Yes, as long as they are registered to do business in the Territory, and the entity uses standard underwriting lending practices.
I’ve lived outside of the U.S. Virgin Islands for at least 15 years. Can I apply for this program if I recently returned home to the USVI to live?
  • An applicant must be a resident of the territory for the last three (3) years prior to the signing of a sales contract, with the exception of those applicants who were prior residents of the territory for at least 10 years and have now opted to return, or whose birthplace is the U.S. Virgin Islands.
My credit score may be an issue. What is the credit score I must have to qualify for this program?
  • An applicant must have a minimum credit score of 620 or conform to the required credit score of the primary lender.

FINANCIAL REQUIREMENTS

What are the financial requirements of this program?
  • Commitment letter from a primary lender.
  • Sales Contract or Purchase Agreement, if applicable.
  • The applicant must obtain the maximum funding available from a primary financing lender.
  • The Participating Lender or Mortgage Company must submit a commitment letter covering at least 60% of the overall project cost.
  • Mortgage payment cannot exceed 36% of the client’s gross monthly household income.
  • The client’s debt cannot exceed 43% of gross monthly household income.
  • The client must obtain a 30-year, but not more than a 40 year (if available), fixed rate loan from a primary lender.
  • The property must be occupied and remain as the client’s primary residence for a minimum period of ten (10) years.

VIEDA

How does the VIEDA fit into the application process for this program?
  • Once the Participating Bank or Mortgage Company qualifies you for a specific amount for a mortgage, if you experience a shortfall (gap amount), the
    Participating Bank or Mortgage Company will refer your mortgage application package to the VIEDA, and the VIEDA will review the request to determine and approve the gap shortfall.

AMERICAN RESCUE PLAN ACT

What is the American Rescue Plan Act?
  • “The American Rescue Plan Act of 2021, also called the COVID-19 Stimulus Package or American Rescue Plan, is a US$1.9 trillion economic stimulus bill passed by the 117th United States Congress and signed into law by President Joe Biden on March 11, 2021, to speed up the country’s recovery from the economic and health effects of the COVID-19 pandemic and the ongoing recession. (Smart Asset, 2021). First proposed on January 14, 2021, the package builds upon many of the measures in the CARES Act from March 2020 and in the Consolidated Appropriations Act, 2021, from December. Sources: (CNN, 2021) (New YorkbTimes, 2021).