October 20th, 2017 7:04 AM by Jackie A. Graves, President
is out there if you want to buy a home but don’t have the cash for a down
payment and don’t think you qualify for a no- or low-down-payment mortgage.
down payment assistance grants (free money!) to interest-free second mortgages
and other special loan programs, options are available for homebuyers who want
to skip the down payment.
we’re not talking about the no-questions-asked type of loans that buyers found
during the housing boom, says Rob Chrane, president of Down Payment Resource, which provides
information about down payment programs.
still need to have decent credit, and all of your income has to be thoroughly
documented,” he says.
payment assistance programs are typically operated by state housing finance agencies and local
money often goes unused because buyers think they don’t qualify for help.
you think of down payment assistance, you think of borrowers that are
income-challenged, but these are not just for low-income folks,” says Deborah
Holloway, a senior loan originator with Christensen Mortgage Services in
can be offered as a grant that doesn’t have to be repaid. Buyers can earn as
much as 140 percent of the median area income and still qualify.
instance, a buyer living in Orange County, California, can make $101,000 a year
and qualify for a grant of up to 5 percent of the purchase price of the home,
according to the requirements of one down payment
assistance program available in the state.
is a no-strings-attached grant,” says Scott Schang, branch manager at BuyWise Mortgage in
Huntington Beach, California. “Getting qualified for a mortgage (through one of
the lenders participating in the program) automatically qualifies you.”
down payment assistance comes in the form of an interest-free loan that may be
structured as a second, silent mortgage that is repaid only when the house is
sold or the first mortgage is paid off.
average, buyers get about $5,000 to $20,000 in assistance, depending on the
program and the state where they live. But a few programs for buyers in
high-cost areas go as high as $100,000, says Chrane.
some programs are designed to work in conjunction with loans insured by the Federal Housing Administration (FHA),
others allow the buyer to get a conventional mortgage. Often the buyer
is required to get a mortgage from a participating lender.
lenders have been coming up with their own programs to help first-time
homebuyers get a home with a low down payment.
of the myths out there is a lot of first-time homebuyers feel as if there are
no mortgage programs available for them if they don’t have a large down
payment,” says Malcolm Hollensteiner, former director of retail lending sales
for TD Bank Group. “That’s not the case.”
has a mortgage program is pitched as an alternative to FHA mortgages, which
allow buyers to put as little as 3.5 percent down. TD’s “Right Step” home
loans can be had with as little as 3 percent down.
By Polyana Da Costa – To view the original
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