Down Payment Assistance

Down Payment Assistance Programs (DPA) are designed to help buyers buy a house.  There are several types of DPAs and different criteria for each.  Here are some basics.

There are over 2200 different DPAs in the country.  83% of those are funded and available for use.

MYTH:  Down Payment Assistance is only for First Time HomeBuyers.  While the majority of DPAs are for first time homebuyers there are several programs that offer assistance to repeat home buyers.  Different DPAs will have different criteria.

There are some common, general requirements:

1) the house being purchased will be owner-occupied, so not for an investment property, however, a duplex, tri-plex or quad-plex can be bought if the owner lives in one unit

2) require the buyer to have a monetary investment in the purchase

3)  homebuyer education

4) must qualify for a 1st mortgage

There are three main types of DPA available:

1) Grant – does not need to be paid back

2) Second Mortgage – and there are different types of second mortgages                                                                 

a. Repayable Second Mortgage – paid off over a set time period

b.  Silent second  mortgage  – needs to be paid back when the house is sold, or when the mortgage is refinanced and/or when there is a change of ownership

c.  Forgivable Second Mortgage – a percentage of the second mortgage is forgiven over time and could be totally forgiven.

3) Mortgage Credit Certificate – these are essentially tax credits that can be applied to your Federal Income Tax.

What can DPAs be used for?

•    The money from DPAs can be used in a variety of ways.
•         Towards mortgage loan downpayment
•         Towards closing costs
•         for Prepaid expenses
•         buy down the mortgage rate
•        for needed repairs

Some requirements:  Again, these vary by the program

• Income Limits
• Sales Price
• Property Location
• FICO score
• Homeownership History
• Military Service
• Profession (Hometown Heroes offers programs for teachers, hospital worker, firefighters, law enforcement, etc.)

Downpayment Assistance Programs offer an advantage to home buyers.  By using the DPA funds to pay closing costs, expenses or repairs, it leaves more money in the hands of the buyer.  Using the funds to buy down the mortgage rate lowers the monthly mortgage payment, potentially saving thousands of dollars over the life of the loan.

To see what DPAs programs you qualify for click the link below:

https://www.workforce-resource.com/dpr/pmt/MFRMLS/JOE_BROWN