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Need Down Payment Assistance To Purchase Your Home?



Life brings about different changes and challenges for each of us individually that can affect us financially, but we must play with the cards we’re dealt, then ask the dealer to hit us with another card. In doing so, we can manifest and then alter our path. Continuing to gather information to move us closer to a win would be one of the cards that the dealer has hit us with. I’m here to hit you with another card.

There are a lot of advertisements that offer home loans at 100%, no money down, etc. but does that mean no money is needed? Probably not. However, there are down payment and/or closing cost assistance programs that one can qualify for, minimizing the amount of money a buyer will need to purchase. Most of these programs are income based and one should speak to their lender to see which programs they provide and may qualify for. Keep in mind, not all lenders are providing down payment assistance, so you may have to deviate from your favorite lender if you need assistance. When speaking with your lender of choice, ensure that they advise if it is bond money or grant money.

Bond money usually comes in the form of cash provided at the settlement table and the lender providing the assistance then places a short-term lien on the property. Such programs are subordinate to the existing first lien whether it’s a VA, USDA or FHA loan. There are no payments that need to be paid while the borrowers occupy the property. For most bond programs, as long as the borrowers occupy the home for at least three years, repayment is waived. However, if the buyer sells the home before the allotted time, repayment will need to be made. There are other bond programs that finance the entire transaction and are designed for low to moderate-income borrowers. These programs also ask the borrowers to be first time buyers or have not owned a home within the previous three years.

Grants are another source of down payment assistance. Again, terms for housing grants will vary based upon the agency issuing the funds but the important thing to remember is, with a housing grant, there is no repayment. Although, grants are issued typically to first-time buyers and used to assist with a down payment and closing costs, some lenders may have in-house programs of their own. For example, consider a couple who wants to buy their first home, but they must first come up with the 3.5 percent down payment and closing costs needed for an FHA loan. For a $100,000 purchase, that’s $3,500 for the down payment and perhaps another $3,000 for closing costs for a total of $6,500. Depending on the lender and their programs, the $3500 or the $6500 can be paid by the lender.

If a buyer receives assistance, does that mean they no longer need to have any money? Probably not. But I always tell a buyer to budget for unforeseen costs that may arise. There is the inspection, re-inspection, wood destroying organism (WDO) inspection, appraisal etc. I only mention these entities because everyone should budget not only for unforeseen fees, but home necessities such as repairs as well. If you have a 401K, Thrift or Employee Stock Purchase Program (ESPP), they are typically used in the purchase of a home. Its your money, this would be a good time to use it. Always remember, you can call a trusted realtor with questions when you are ready to purchase.

Dana Lewis, Fl Realtor

eXp Realty, LLC

404-624-6995

Dana.Lewis@eXpRealty.com

DependOnDanaRealtor.com

Got a real estate question, need or concern? … “You Can Depend On Dana”

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