Many States, Cities and Counties offer Down Payment Assistance Loan programsto first time homebuyers whose income is low-to-moderate. Each program participant establishes the criteria for their local area. Usually, these loans are for homebuyers earning up to 80% of the HUD median income for their County and family size. Many of these loans bear zero interest, are "silent seconds", meaning they require no monthly payments, with the entire balance due when the home is transferred, sold, refinanced, or the primary mortgage is defaulted on.

These PAL programs are for first time homebuyers- those who have never owned a home, or have not owned a home for the previous three years - who meet the income criteria set for their local program, and will have less than $2,000-5,000 in liquid reserves after closing. Some programs require matching funds from the homebuyer.

The potential first time homebuyer has to:

1. Decide if the PAL meets their needs
2. Select a participating lender
3. Call the lender and find out if they qualify for the PAL
4. Begin shopping for a new home
5. Participating Lender submits PAL application and documentation

The primary first mortgage may be an FHA, VA, Conventional Fixed Rate Mortgage, and may allow a Bond program.

These Purchase Assistance Loans are not subsidized loans, and therefore contain no recapture provisions. They do require that the home be owner-occupied for the life of the loan, and are usually for single-family residences, which may be a house, condo, townhome, or manufactured home on permanent foundation meeting State criteria (not in parks).

Guidelines and criteria may vary widely, so check with the Housing Authority for the area you are considering buying your home in.

The State of Oregon and the City of Medford both offer a Purchase Assistance Loan program, and both programs may be used in conjunction with the Oregon Bond Loan. With many first time homebuyers finding their biggest hurdle to fulfilling their American dream of homeownership is the lack of a down payment. As with the Mortgage Credit Certificate, check with your local Housing Finance Agency for details on local programs available near you.

 

See you at the closing table!

Karen Cooper - OR/CA Mortgage Consultant - www.Quality4Loans.com

 
Post is included in group: Creative Financing, Grants Deal Closers

6 Comments on First Time Home Buyer Resources (Part 2– Purchase Assistance Loan - PAL)

Great news from the loan company and PAL program.  We need all the help we can get.

01/07/2008 01:36 PM by Keller Williams Realty Brazos Valley

Ashland, Oregon also has some down payment assitance.

01/07/2008 01:50 PM by Krista Bolf Ashland Agent, Ashland Real Estate & Medford Real Estate (Coldwell Banker Pro West)

This is great information and one of the reason's why I love AR.

Thank you!

01/07/2008 01:59 PM by Lorinda Ward (Acworth Georgia Realtor)

Matt - Yes, the more tools we have, the more buyers we may help. Thanks for stopping by.

Krista- Oregon's PAL program works for Ashland homebuyers, as does the Oregon Bond Loan. Unfortunately, a couple of years ago the City of Ashland discontinued their down payment assistance program that gave buyers up to $2,500 to use due to lack of use - their maximum assistance amount just wasn't high enough to really help buyers. They are working on establishing the Housing Trust Fund which could be a more substantial source of assistance, so let's hope they get it funded. Thanks for commenting.

Lorinda- You ar welcome! AR really is a wonderful resource for people. Thanks for commenting.

01/07/2008 03:35 PM by Karen Cooper - Quality Home Loans, Inc.

Thanks for letting me know Ashland no longer has assistance.  Not that it helped much.  We are lucky to have someone on top of all the local lending opportunitites

01/07/2008 03:50 PM by Krista Bolf Ashland Agent, Ashland Real Estate & Medford Real Estate (Coldwell Banker Pro West)

You are welcome, Krista. Things can change at the speed of light in our current market environment!

01/07/2008 03:54 PM by Karen Cooper - Quality Home Loans, Inc.

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Mortgage Company: Karen Cooper - Quality Home Loans, Inc.
Karen Cooper - Mortgage Consultant OR/CA
Ashland, OR
More about me…
Karen Cooper - Quality Home Loans, Inc.

Office Phone: (541) 608-6003
Cell Phone: (541) 601-4303
Email Me
25 years experience providing Quality Home Loans to Southern Oregon and California| Assisting First Time Home Buyers in need of Down Payment Assistance in Oregon| Specializing in Oregon Bond Loan| Oregon VA Loans| Serving all of Jackson County Oregon including Ashland- Talent- Phoenix- Medford-Jacksonville- Ruch- Central Point- White City- Eagle Point- Shady Cove- Gold Hill, as well as Josephine County including Grants Pass- Merlin- Wilderville and Northern California communities in Siskiyou County| Helping Southern Oregonians and Californians on the road to fulfilling the American Dream of Homeownership

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