Down Payment Assistance Programs
Down Payment Assistance Programs
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Down Payment Assistance Programs (DAPS) are loan programs designed to assist first-time home buyers with the required down payment and closing costs required by the FHA loan program.
These types of down payment assistance programs are typically broken into two types of loan programs. These are the 501 (c) (3) Non-Profit organizations or county, city, state backed down payment assistance programs.
The 501 (c) (3) non-profit down payment assistance programs will typically require the assistance of the home seller in order for the buyer to take advantage of the program. Following is a list of just some of the available down payment assistance programs offered by non-profit organizations.
HART - Grants up to $15,000 towards down payment and closing costs.
Neighborhood Gold - Grants up to 20%, includes Mortgage Payment Protection
The above programs typically do not have a repayment schedule nor is there a second mortgage required. All of these types of down payment assistance programs use a FHA loan. Since you must be able to obtain FHA financing in order to use any of these programs, learn more about FHA Loan Qualifying
We have a lender who is very familiar with FHA loans and the different down payment assistance programs. If you do not have a lender we will be happy to introduce you to ours.
FHA Loan Qualifying Summary
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FHA loans are the easiest type of real estate mortgage loan to qualify for. The FHA guidelines for loan qualification are the most flexible of all mortgage loans that require less than 5% down payment.
Following is the basic FHA loan qualification guidelines.
Two Years of steady employment, preferably with same employer.
Last two years Income should be the same or increasing.
Credit report should typically have less than two thirty day lates in last two years.
Bankruptcy's must be at least two years old, with good credit since.
Foreclosure's must be at least three years old, with good credit since.
Your new mortgage payment should be approximately 30% of your gross income.
These are some of the most basic of FHA guidelines for qualifying for a FHA loan. If you have answered yes to most of these statements, you probably qualify for a FHA mortgage loan.
Neighborhood Gold Down Payment Assistance
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The Neighborhood Gold Down Payment Assistance program allows homebuyers to purchase a home with no downpayment and no closing costs by providing the money necessary to purchase without repayment!
This program is not limited to first time homebuyers. The Neighborhood Gold program may be used by any homebuyer that qualifies for a FHA loan.
You may receive from 3% up to 10% towards your down payment and closing costs dependant on the amount of participation of the seller.
An added benefit of the Neighborhood Gold Down Payment assistance program is that for the first year you will receive free Involuntary Unemployment Mortgage Program providing coverage in the event they lose their job as a result of strike, lockout, individual or mass layoffs, or loss of income due to business failure or bankruptcy. This insurance will make you monthly payment of up to $1,500 for up to 12 months.
The program is a 501 (c) (3) nonprofit program, which issues cash grants to homebuyers at the closing of their loan. The only requirement of the program is the participation of the seller and the homebuyer to qualify for a FHA loan.
In order to use the Neighborhood Gold Down Payment Assistance Program, you must be prepared prior to making an offer on a property. Since the program requires the participation of the seller, it must be negotiated before finalizing your purchase offer.
There is 1% fee (not to exceed $1,000) for the use of this program. This fee maybe paid by the seller of deducted from the cash grant and again, must be negotiated in the initial transaction.
HART Down Payment Assistance Program
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Housing Action Resource Trust (HART) is a California 501 (c) (3) non-profit housing and community development corporation servicing selected communities throughout the United States.
HART provides down payment assistance to individuals and families. HART down payment assistance is provided by HART in a form of a "gift"
HART will gift up to $15,000 to homebuyers for down payment & closing cost
No repayment of Gift
Homebuyer will need 1% of sales price from own funds
HART program can be used to purchase 1-4 units homes
Homebuyer will need to complete a pre-purchase counseling
As with many of the down payment assistance programs, HART requires the participation of the seller in the transaction