We recently reported that 70% of American adults are completely unaware that down payment assistance programs even exist. That’s a shame. For the majority of first time home owners, coming up with the down payment is the biggest hurdle. So it stands to reason that learning about the various down payment programs would be the first step towards home ownership.
Many homebuyers have become overwhelmed by all the questions to ask before jumping into homeownership — especially first-time buyers and those who have stayed put since the recession. Questions arise such as, “Am I ready? Is this a good investment for me? Can I afford it?”
Perhaps the biggest concern is how to pay for such a large purchase.
For example, first-time buyers often cannot afford a large down payment. According to data from the National Association of Realtors Confidence Index, about two-thirds of first-time buyers made a down payment between zero and 6 percent.
In 2009, 77 percent of down payments were in the zero to 6 percent range. The number of small down payments today is lower than in 2009, but it’s higher than this time last year when 61 percent fit that range.
One option for homebuyers is down payment assistance (DPA) programs. These can be unpopular because of all the hoops that the buyer has to jump through.
DPA requires separate applications, separate loan approval and, because these typically require outside approval, they take time. At closing, they will result in a separate lien on the property and must be repaid at the point of resale or refinance in the future.
Also — as with Georgia Dream, for example — the homebuyer must take a class on homeownership prior to qualifying and getting approval for DPA, and qualifying income has a small maximum amount.
I wanted to share some information regarding a down payment assistance program that seems to work well whether or not your client is a first-time buyer. The program, called NHF Platinum, is through the National Homebuyers Fund, and it’s offered through participating mortgage lenders.
>> read the full article at inman.com