Looking for a down payment assistance program that gives free money? The Golden State Finance Agency offers grants (it does not have to be paid back) for use for down payment. Grant amounts can range from 3%-5% of the sales price of the loan and interest rate will depend on the grant amount plus credit score.
Today, February 16th, 2016, rates for a 4% grant with a 660+ credit score is 4.125% on an FHA loan. Assuming that FHA requires a 3.5% down payment, one could have their entire down payment requirement handled with the GSFA grant.
In #Ukiah, California, it is very common for closing cost to be paid for by the seller. Thus, with the GSFA grant program and the seller assisted closing cost, a borrower can get into a home with no money out of pocket.
There are requirements that must be met though and not everyone will meet them. Debt to income ratios on the grant program are maxed out at 45% and there are income limitations for this program that are county specific. However, in #Mendocino County, California and #Lake County, California, the income guides are $80,155 which is significantly higher than the median norm. On this program, the only way a lender can get paid, and we all want to get paid, is for the buyer to pay an origination fee of 1.5%. Thus, closing cost to be paid for by the seller are a bit higher than normal.
For the savvy Realtor who understand this program, you now have another tool to use for those buyers that are lacking a bit of cash!