Have you or your clients been stressed that down payment assistance went away in September?! Stress no longer! It is true that seller funded down payment assistance went away, but seller funded down payment assistance was only one kind of "DPA". I am sure that it had its place and was used often enough, however, in five years of doing loans, I never used seller funded DPA, not even once! Why?! Because I am the Queen of finding my income qualifying clients down payment grants from City http://activerain.com/blogsview/834247/City-of-Grand-Rapids-Down-Payment-Assistance-Program-we-CAN-make-it-work, Non-profit, or Bank grant programs, grants that don't result in the increasing of sales price (which can be really tough to get by underwriting in our declining Michigan market).
So, let me tell you about HOP Funds. HOP (Home Ownership Program) Funds come from the Federal Home Loan Bank, and they get assigned to different banks. We just so happen to be fortunate that one of our bank partners gets enough funds to pass around. Some might think it is incredible that a bank would allow a broker to use these funds that they could keep in house. It is pretty incredible, but I think their mindset is, better to use them than lose them!
Key requirements are:
- Must be at or below 80% Area Median Income (i.e.- family of 1- $34,800, 2- $39,750, 3- $44,750, 4- $49,700)
- Up to $5,000 in down payment assistance
- 3 to 1 match program, so client needs $1,667 to get full $5,000
- Can be used for principal reduction, closing costs, or pre-paids
- Can be combined with other down payment programs
- Only $500 needs to be the clients own funds, the rest can be a gift
- Can be combined with FHA, VA, RD, MSHDA
- Grant is forgiven over the course of five years, repayable only at time of sale (out of proceeds) or refinance (some exceptions apply)
- It is a zero interest, no payment loan, and the money that is forgiven is prorated by each month
For more information, give me a call at (616) 719-4513