What is HUD Downpayment Assistance?
HUD, the (Department of Housing and Urban Development) has been providing down payment assistance for quite awhile now (since 2003). The program was designed to assist first time homebuyers with down payment on a HUD home. The funds are issued through your local city, county, or the Department of Community Affairs in your state.
This initiative is issued only to first time homebuyers to help them with overcoming the financial hurdles associated with purchasing a home, and to help with revitalizing neighborhoods, giving lower income individuals a chance to become homeowners.
Under the initiative, HUD will provide assistance with down payment and closing costs. Since most FHA loans require a 3.5% down payment, this program will provide the necessary money through grants. If you receive $5,000 for instance, then it's forgivable over time. The program is set up as an interest free second mortgage, forgivable at 20% per year. After you have lived in the house for five years, the second mortgage is forgiven. Should you move after only three years you would have to pay back part of the mortgage. The help is capped at $10,000 or six percent of the purchase price, whichever is greater.
If you would like more information on the HUD Downpayment Assistance please contact Winter Baserva at 678-463-3173.
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