How much is the benefit that Drexel University/Drexel University College of Medicine provide?
Drexel University/Drexel University College of Medicine will provide up to $15,000 through a forgivable loan to any Benefit eligible full-time/ part-time employee for the purchase of a home within the defined borders of the Drexel University Community. Drexel University/Drexel University College of Medicine shall provide a $5,000 forgivable loan to an eligible employee toward the renovation of a home within the defined borders.
This benefit is a $15,000 forgivable loan. What does that mean?
Drexel University/Drexel University College of Medicine will forgive this loan on the following schedule:
After one year of service 20% of the loan will be forgiven and the employee is responsible for $12,000 repayment.
After two years of service 40% of the loan will be forgiven and the employee is responsible for $9,000 repayment.
After three years of service 60% of the loan will be forgiven and the employee is responsible for $6,000 repayment.
After four years of service 80% of the loan will be forgiven and the employee is responsible for $3,000 repayment.
After five years of service 100% of the loan will be forgiven and the employee is responsible for $0 repayment.
The renovation benefit is a $5,000 forgivable loan. What are the terms?
The property must be owner occupied and remain the employee's principal residence for at least two years. Should the property at any time during the two-year period cease to be owner occupied and the employee's principal residence, the employee agrees to pay the full $5,000 back to the University/College, unless the property is sold to Drexel University/DUCOM, in accordance with the Pre-Purchase and Post-Purchase certifications required as a condition of being eligible for the forgivable loan.
What are my tax obligations for the "forgivable" loan?
The Internal Revenue Service Code treats most forgiveness of debt as taxable income. Therefore, the portion of the loan that is forgiven by Drexel University/Drexel University College of Medicine each year is considered “taxable” income to you. Drexel University/Drexel University College of Medicine will withhold the appropriate amount of tax from your earnings.
How do I receive the loan proceeds?
Once you are approved for the loan, Human Resources will provide you with the paperwork necessary for Drexel/DUCOM to make a check payable to the mortgage lender or the settlement agency that will be conducting your closing. It is your responsibility to complete these forms accurately and return them to Human Resources at least ten days prior to your scheduled closing date.
Can the benefit be used for a security deposit for rental housing?
No. The benefit must be applied towards the purchase of a home in the defined geographic boundaries.
I already own a home, so I'm not a first-time home buyer. Can I still participate in Drexel University's/Drexel University College of Medicine's Employee Home Ownership Program?
Yes. The program is for all full-time/part-time Benefit eligible employees purchasing a home in the defined borders. It is not restricted to first-time buyers; however, you must move to the new home and reside in the home as your primary residence.
I am purchasing a home that will become my principal residence, but I want to lease it to another party for a period after closing. Is this permissible under the Drexel University/Drexel University College of Medicine Employee Home Ownership Program?
No. The home must be used as the primary residence for the entire time period in order for Drexel University/Drexel University College of Medicine to provide the loan.
I just bought a house. Is the Drexel University/Drexel University College of Medicine Employee Home Ownership Program retroactive?
No. The “forgivable” loans will only be provided for homes purchased in the designated zip code areas with settlement occurring after November 1, 2010.
Can I use the Drexel University/Drexel University College of Medicine forgivable loan for a second or vacation home?
No. The loan must be used for the purchase of a primary residence.
Can I use the Drexel University/Drexel University College of Medicine Employee Home Ownership Program loan in the refinancing of my current home?
No. The “forgivable” loan must be used for a purchase of a home with settlement occurring after November 1, 2010.
How often can I participate in the Drexel University/Drexel University College of Medicine Employee Home Ownership Program?
You will be eligible to participate in the program once in any five-year period.
Do I have to use the vendors Drexel/DUCOM with whom has secured a relationship?
No. You are encouraged to shop around and obtain vendors that meet your very specific needs.
What happens if my employment at Drexel University/Drexel University College of Medicine ends during the five year loan term?
The remaining balance of the loan will become due in 180 days. If your employment ends because of death or permanent disability for which you are collecting periodic income benefits from Drexel University’s long term disability plan, Drexel University/Drexel University College of Medicine will forgive the balance of your loan.
What happens if I go on paid or unpaid leave?
If you are on an approved paid leave, the loan will continue to be forgiven. However, if you are on unpaid leave for more than 180 days, forgiveness of the loan is “suspended” during your leave period. In other words, the loan will not be reduced or “forgiven” over the time period of the unpaid leave. If you do not return to work within one year, the remaining balance of the loan will become due within 180 days. If you return, the forgiveness of the loan begins again in the month following your active return to work. Any time that you were out on unpaid leave will be added to the end of the original loan period.
Does my beneficiary or estate have to pay back the loan if I die?
No. Drexel University/Drexel University College of Medicine forgives the outstanding balance upon the death of the employee however, if the beneficiary of the estate opts to sell before the end of the five year period they must honor Drexel’s/DUCOM's right of first refusal policy.
Are part-time employees eligible?
Yes. Part-time Benefit eligible employees are eligible for this benefit.
My spouse/domestic partner and I both work for Drexel University/Drexel University College of Medicine. Do we get twice the normal benefit?
No. Drexel/DUCOM will only provide one forgivable loan per new home purchase. If the home is purchased jointly by two Drexel University/Drexel University College of Medicine employees, both employees must sign the application and other required documentation. Drexel University/Drexel University College of Medicine will continue to forgive the loan so long as one of the employees remains a full-time active Drexel University/Drexel University College of Medicine employee.
I work in one of the satellite Drexel/DUCOM locations. Does the Benefit cover the area where I work?
Unfortunately for now the scope of the program has been limited to the geographic borders set forth in the program guidelines. As the program continues to evolve, other locations have not been ruled out however; the immediate strategic plan “to live where you work” is confined to the West Philadelphia area.
What is title insurance?
Title insurance provides homebuyers and lenders with vital protection against losses arising from certain title issues that are undiscoverable from public records--including forgery, fraud and liens--which might limit a homeowner's use and enjoyment of their property.
Why do I need title insurance?
There are two types of insurance: owner's title insurance, called an Owner's Policy, and lender's title insurance, called a Loan Policy. Most lenders require a Loan Policy when they issue you a loan. The Loan Policy is usually based on the dollar amount of your loan. It only protects the lender's interests in the property should a problem with the title arise. It does not protect the buyer. The policy amount decreases as you pay down your loan and eventually disappears as the loan is paid off.
An Owner's Policy is usually issued in the amount of the real estate purchase price. It is purchased for a one-time fee at closing and lasts for as long as you have an interest in the property. Only an Owner's Policy protects the buyer should a covered title problem arise. Possible hiddent title problems can include:
- Errors or omission in deeds
- Mistakes in examining records
- Undisclosed heirs
- Others claiming an interest in your property
An Owner's Policy provides assurance that your title insurance company will stand behind you--monetarily and with legal defense, if needed--if a covered title problem arises after you buy your home.
Why do I need a home inspection?
Buying a home could be the largest single investment most of us will ever make. To minimize unpleasant surprises and unexpected difficulties, you’ll want to learn as much as you can about the newly constructed or existing house before you buy it. A home inspection may identify the need for major repairs or builder oversights, as well as the need for maintenance to keep it in good shape. After the inspection, you will know more about the house, which will allow you to make decisions with confidence.