Down Payment Assistance

Down Payment Assistance (DPA) Loan Program

This national down payment assistance loan program helps responsible buyers overcome the challenge of the minimum investment needed to purchase a home. Over the years, home prices have increased, and wages have stagnated, making it challenging to save to buy a new home. The program helps new homeowners gain equity in their new homes now rather than wait to save for a down payment, and home prices are higher and may even become unaffordable.   

The program is a first and second mortgage from one source without waiting for various municipalities to have to wait for available down payment assistance funds and struggling through different confusing municipality program requirements.  This one-source loan program makes it easier and faster to get approved and fund your loan. 

How does the down payment assistance program work? 

Buyers apply and qualify for an FHA or conforming affordable home loan with Fannie Mae or Freddie Mac. The program provides down payment assistance as a forgivable or repayable second mortgage. And offers 3.5% or 5% of the purchase price as down payment assistance funds to be used how the buyer wants towards a down payment, closing, and pre-paid costs. The assistance is in the form of a repayable loan with a 10-year term or a forgivable loan with a 30-year term. Down payment assistance programs are limited to the purchase of one-unit primary homes, such as single-family homes, townhomes, and condos, 

What are the qualifications for a down payment assistance program? 

The Down payment assistance program has an FHA or conventional/conforming option. Both have slightly different guidelines and qualifications. Below are some general points for each program. The best path to success in finding the best loan program for you is to contact us to review your financial information.  Getting pre-qualified for these programs is very important to complete in advance due to the layered requirements. The programs are easy, provided the pre-qualification is completed.    Down payment assistance programs are limited to the purchase of one-unit primary homes, such as single-family homes, townhomes, and condos, 

FHA Program 

• The down payment assistance amount is 3.5% or 5% of the purchase price 
• Forgivable and repayable second mortgage options 
• A first-time homebuyer status is not required.
• Credit scores start and 600 with restrictions to 639
• Credit scores above 640 have no program restrictions 
• Homebuyer Education is required for credit scores lower than 640

Conventional/Conforming Program

• A minimum credit score of 620 is required 
• One borrower must be a first-time homebuyer
• the second mortgage is a 10-year fixed rate with an interest rate of 2% higher than the first mortgage. 
• No first-time homebuyer classes are required 
• Income limitation may apply depending on geographical location