Down Payment Money is Available and You May Qualify
Nov 22, 2019
You’ll be surprised to learn that homes in high costs areas (LA Westside, Hollywood, DTLA, Orange County, etc) may qualify for down payment assistance.
Down payment assistance programs (DPAP) are available across the United States at the state, county, city levels and in certain private-sector groups. For example, in California, the California Housing Finance Agency (CalHFA) offers affordable loan programs and assistance.
What is the definition of a "first-time homebuyer"? Individuals who have had no ownership in a principal residence during the recent 3-year period ending on the date of purchase of the property. This may also include a spouse, so if either meets the above test, they are considered first-time homebuyers. Also for certain assistance programs, you do not need to be a first-time homebuyer to use CalHFA’s FHA and Conventional first mortgage loans.
How it works: Most people borrow a large amount of money they need to buy a home. This type of borrowing is called a first mortgage loan. There are also mortgage loans that can help out with down payment or closing costs, called junior loans. DPAP has first and junior loan options, including low to zero interest rate down payment assistance loans. While there’s no minimum credit score requirement, however, a “preferred" minimum score of 640 helps to keep the monthly payment affordable.
The DPAP qualification is based on income limits, sales price limits, and other eligibility criteria. In addition to borrower eligibility, a homebuyer education and counseling are required. The education can be accomplished by attending a 1-day class usually available during weekdays after work hours, Saturdays, or, completing the course online. Upon completion, a certificate is issued and used for loan program qualification. The certificate is good for 12 months.
TIP: even if you’re not ready to purchase a home today, the homebuyer certificate should be obtained as soon as possible because the funds are available based on first-come-first-served basis.
Down payment money is out there. Let’s if you’re eligible
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