Homebuyer Down Payment Assistance And Grant Programs
This ARTICLE On Homebuyer Down Payment Assistance And Grant Programs Was PUBLISHED On June 30th, 2020
Homebuyer Down Payment Assistance And Grant Programs have been very popular prior to the coronavirus pandemic.
- However, many DPA and Grant mortgage programs have been suspended until further notice during the pandemic
- As of today, many homebuyer down payment assistance and grant programs remain suspended and have not reopened
- Gustan Cho Associates Mortgage Group will keep our viewers and clients as DPA and Grant Programs reopen
- Not all downpayment assistance programs are the same
- Every county and/or state has its individual DPA and grant programs
- Eligibility guidelines are different on every DPA and grant mortgage programs
In this ARTICLE, we will cover and discuss Homebuyer Down Payment Assistance And Grant Programs.
How Much Money Is Needed To Purchase A Home
Many homebuyers are under the impression they need a 20% down payment to purchase a home.
- This is not the case. The down payment requirements depend on the loan program
- FHA loans require only a 3.5% down payment
- VA and USDA loans require no down payment
- Lenders offer 100% financing on VA and USDA loans
- Not everyone qualifies for VA and USDA loans
- Borrowers need to be active and/or retired members of the U.S. military with a certificate of eligibility to qualify for VA loans
- Only properties in designated rural areas can qualify for USDA loans
- Fannie Mae and Freddie Mac require a 3% to 5% down payment on conventional loans
- Besides the down payment, there are closing costs on all home purchases and refinance transactions
The amount of closing costs varies depending on the type of home and the area the property is located. Most homebuyers only have to come up with the down payment and not the closing costs. Closing costs on a home purchase can be covered with either a sellers concession and/or a lender credit.
How Does The Homebuyer Down Payment Assistance And Grant Program Work
There are all types of down payment assistance and grant programs throughout the United States.
- Many families are in a need to purchase a home
- However, many can afford the monthly housing payments on a new home but cannot come up with the down payment
- The down payment can be gifted by family members
- However, there are folks who can afford a home but do not have any family members that can gift them the down payment on a home purchase
The down payment assistance and/or grant program can be a miracle for these folks.
Terms Of The Homebuyer Down Payment Assistance Mortgage Program
DPA mortgage programs can have several types of repayment plans.
- Some DPA mortgage programs is a second mortgage where the homeowner needs to pay it back when they either pay off the loan or sell the home
- Other down payment assistance programs forgive the down payment if they live in the home for a certain amount of time
Not all DPA mortgage programs are for first-time homebuyers.
Purpose For The Homebuyer Down Payment Assistance Mortgage Programs
The purpose for the down payment assistance and grant programs is to assist first time homebuyers with the down payment and closing costs in buying their first homes. Borrowers need to meet the minimum agency mortgage guidelines of FHA, VA, USDA, FANNIE MAE, or FREDDIE MAC. Each down payment assistance program has its own lending standards. DPA programs want to assist hard working individuals and their families who have the following requirements:
- Stable jobs and income
- Have a minimum credit score requirement
- The minimum credit score requirements depend on the DPA program
- Have shown financial responsibility but do not have the down payment and/or closing costs for a home purchase
Choosing A Lender
If you are interested in a particular down payment assistance or grant program, the lender needs to be affiliated with that particular DPA program. GCA Mortgage Group is a national lender licensed in multiple states. We are affiliated with dozens of DPA mortgage programs in states we are licensed in. You can also check with the DPA mortgage program in your county and get a list of lenders who are associated with them. As of today, many DPA mortgage and grant programs are still suspended due to the coronavirus crisis. However, we expect the down payment assistance and grant mortgage programs will be reopening in the weeks and months to come. Stay Tuned. Gustan Cho Associates will keep our viewers updated as more news about DPA mortgage and grant programs hit the market.