Understanding Down Payment Assistance Programs. Sponsored by

Transcription

1 Understanding Down Payment Assistance Programs Sponsored by

2 A Word of Thanks

3 About ANDP Celebrating 25 th Year in 2016 Affordable Housing Advocacy Piece by Piece Foreclosure Response Initiative ANDP Loan Fund Capital for Developers of Affordable Housing Housing Development 510 Homes Impacted since 2008

4 Today s Agenda 1. Quick Overview of the Homebuying Process 2. How Down Payment Assistance Reduces Your Costs 3. Types of Assistance Programs 4. DPA Programs: Uses, Requirements, Eligibility 5. Live Demonstration of How to Identify DPA Programs 6. Next Steps 7. Q&A

5 1. Start Preparing Financially Savings, Credit Score, Reduce Debt 2. Visit with Housing Counselor & Complete Homebuyer Trainingwww.andphomes.org/homebuyer 3. Determine how much house you can afford 4. Start Search for Down Payment Assistance Impacts Lender Choice 5. Get Pre-Approved for Mortgage Loan 6. Find a Real Estate Agent Familiar with Affordable Programs 7. Search For Your Dream Home and Make an Offer! 8. Get a Home Inspection 9. Identify the Best Mortgage Product FHA, VA, Special Affordable Loans 10.Close the Sale Typical Homebuying Process

6 Reducing Your Out of Pocket Expenses Sales Price of Home $100,000 Closing Costs (~ 3.5%) $3,500 Down Payment (FHA 3.5%) $3,500 Inspection & Appraisal $800 OUT OF POCKET $7,800

7 Types of Assistance Programs Down Payment Assistance Programs Affordable First Mortgage Other Mortgage Products with Special Assistance/Benefits VA Loans Veterans, Active Duty, Reserve/Guard, Surviving Spouse USDA Loans In rural communities Lender Portfolio Products Special affordable programs

8 Down Payment Assistance Down Payment Assistance: An homebuyer program where the assistance provided is separate from the first mortgage. Usually funded by government or nonprofit organizations. Amounts vary by program/location ($5,000-$25,000+). Uses of Funds Down payment Closing costs Prepaid expenses (Inspections, appraisals) Repairs Principal Reductions

9 Down Payment Assistance Types of Assistance Grant Forgivable Loan Usually has an affordability period, pro rata portion forgiven each year Zero Interest, adds no expense to your mortgage as long as you are compliant Called many things: 2 nd Mortgage, Soft 2 nd, Silent Second Deferred Loan Zero interest, adds no expense to your mortgage Repayable upon selling or refinancing your home

10 Down Payment Assistance General Eligibility & Requirements Check program for specifics $1,000 or 1% in the transaction Homebuyer Education (Pre-Purchase, Post-Purchase) Choose from approved lenders Must be able to qualify for a mortgage Additional requirements depending upon the program/provider Household Income Limit Sales Price Limit Property Location First-Time Homebuyer (Not always a requirement; 3-yr Rule) Must reside in the home Must not own other property

11 Types of Assistance Programs Down Payment Assistance Programs Affordable First Mortgage Other Mortgage Products VA Loans Veterans, Active Duty, Reserve/Guard, Surviving Spouse USDA Loans In rural communities Lender Portfolio Products Special affordable programs

12 Affordable First Mortgage Down Payment Assistance: Not affiliated with the lender Usually offered by a governmental or nonprofit agency Often a separate underwriting process Coordination required between lender, DPA provider, realtors, closing attorney Affordable First Mortgage Offered by local, state or federal housing agencies Reduced interest rate Includes down payment assistance within the process Lower buying costs Lower monthly payment Increased purchasing power Available statewide

13 DownpaymentResource.com

14 Questions? George Burgan, ANDP Director of Communications Important Sites To Remember: