There is little doubt the Sapphire Grant Program will be considered the Best Friend of Home Buyers and Real Estate Professionals as well.
There are Down Payment Assist Programs…and then there is the Sapphire Grant. First time home buyers and seasoned home owners can both take advantage of this innovative funding source for assistance with down payment, closing costs and/or prepaids (taxes, insurance and mortgage insurance, as applicable).
The Sapphire Grant is sourced through National Homebuyers Fund (www.nhfloan.org) non-profit. It is offered through qualified wholesale lenders directly to Mortgage Brokers throughout the Country. The Sapphire Grant cannot be accessed through a retail bank or Credit Union. The main qualification of the program is income based upon 115% of the AMI (Average Medium Income) of each County in the Nation. The 115% calculation can be found at http://nhfloan.org/programs/dpa-limits.aspx (remember, the calculations have already been performed).
What is so exciting about the Sapphire Grant is the shear simplicity of the program. There are no specific forms, no lengthily application process and no restrictive guidelines that also guarantee no one will qualify (as in most Down Payment Assist Programs). Further, it is a fully forgiven grant with absolutely no Recapture (required payback) Period in the event of sale or refinance.
Let’s focus on what the Sapphire Grant IS:
- Available for VA, FHA and USDA mortgage products
- Available for SFR, Condo, Townhomes, 2 plex (restrictions apply), Manufactured Homes
- Owner occupied only
- 620 Credit Scores (640 may be applicable), standard VA, FHA and USDA underwriting guides.
- County loan limits apply. $417,000 maximum loan amount (no high balance loan limits)
- One loan, no need to qualify separately for the Sapphire Grant
- NOT restricted to First Time Homebuyers. No seasoning required on the sale of previous home. In fact, the borrower can opt to keep and rent their existing home
- AMI of 115% required; however, it is not required to utilize all income of the household. In other words, one borrower’s income can be used to stay below the 115% AMI requirement. Income analysis mirrors standard underwriting guidelines
- Sapphire Grant up to 5% of the purchase price (program specific guidelines)
- Fixed rates that do not move with the market (currently 3.5% for USDA)
- Borrower paid compensation platform (closing costs can be derived from the Grant)
- Income limited, not Asset limited. The borrower may have any amount of savings/investments with no need to deplete personal assets prior to accessing Grant funds)
- No payment calculation added to Debt to Income ratios
- No second lien filed (the Sapphire Grant virtually disappears the day after signing)
- EPO (Early Pay Off of six months); thereafter, no restrictions to the ability to refinance or sell
- Sapphire Grant funds can be used in combination with gift funds and/or seller contributions
- Nationwide availability
- No time frame restrictions. This is not a fund that is expiring. NHFloans.org is committed to the ongoing funding of the program.
Over the years I have taken innumerable courses and workshops to be able to offer my clients every opportunity for access to Down Payment Assistant Programs. In virtually every instance I have left the venue with the thought that “I have never met anyone who will qualify for both the first mortgage AND the DPA loan/grant”. In most cases, the loans would be declined by the calculator. In many instances first mortgage guideline will not allow for inclusion of certain household income (unseasoned second jobs, roommate rent, new business income…just to name a few). Conversely, the typical DPA loan/grant REQUIRES the use of ALL household income (Grandma’s Social Security, high schoolers part time job at baby sitting or fast food restaurant, paper route money). In essence, the income is cut by the underwriting process of the first mortgage and “grossed up” by the inclusion of all household income sources for the DPA loan/grant.
Unfortunately, many consumers read the bullet points of the Down Payment Assist Programs and I (and other mortgage professionals) am left with the daunting task to explaining the fine print to the DPA program and, in most cases, dashing all hopes of home ownership. The Sapphire Grant Program is completely opposite this experience. I am able to inform my clients they are eligible for the program by simply reviewing their income documentation and verifying the AMI of the county of the property location.
Like all mortgage programs, there are additional details; however, if a borrower is qualified for a VA, FHA or USDA loan AND meets the AMI income limits of their County at 115% it is highly probable they will qualify for approval of funds from the Sapphire Grant Program. The call to action is obvious, share the specifics of the Sapphire Grant Program as much and as often as possible. This program can, and will, do more to encourage home ownership of First Time Home Buyers, Millennials and home owners devastated by the housing recession than any program I have seen in years.
For further information, reach out to a Licensed Mortgage Broker. My Company is licensed in several states, both myself and my experienced colleagues are dedicated to you or your clients home ownership goals.