Equity Resources is proud to announce “Equity Zero.” This new home loan program was created to solve America’s #1 obstacle to home ownership: The Down Payment. Equity Zero is a down payment Gift Program available in NC. As a 97% Loan to Value conventional loan with Equity Resources GIFTING 3% of the sales price to the buyer at closing. The 3% down payment is a TRUE GIFT from Equity Resources.
Company President Ed Rizor said, “We’re putting our money where our mouth is…$500,000 to promote home ownership for people who are paying their rent, paying their bills, paying their student loans, but don’t have money for a down payment to buy a home.”
Down Payment Gift Program Details
Created for the borrower with a credit score of 660 or higher, perhaps considering a state bond program, payment assistance or FHA options. This program creates the opportunity for someone to buy a home in 30 days, with no down payment!
Equity Zero is a 97% Loan to Value conventional loan with Equity Resources GIFTING 3% of the sales price to the buyer at closing. The 3% down payment is a TRUE GIFT from Equity Resources. There is NO repayment required. No recapture period. No second mortgage. Along with this, 3% maximum seller contribution is allowed, to defray closing costs and prepaid items.
This is not like a bond program where the loan needs to wait in line for approval for the down payment assistance. This is underwritten by Equity Resources in-house which speeds up the purchase process. Equity Resources average turn time for the first half of 2017 on conventional loans is less than 30 days from application date to closing date.
The Down Payment Gift from Equity Resources is only for a limited time and will expire when funds run out. There are some income limits in certain areas, based on property address. In NC, we are finding that properties listing less than $250,000 and /or are in the Raleigh Metro area EAST are generally qualifying with no property restrictions due to Hurricane Matthew. The income limits for this down payment Gift Program in NC do vary by address, but the disaster designation for that part of our State is in effect until October of 2018.
This program is available in all states Equity Resources is licensed. A sample scenario, in NC, of this loan program would be: Buy a $300,000 home (Loan Amount $291,000) with a 4.50% fixed interest rate/5.083% APR for 30 years and have a $1,663.60 monthly payment. (Payment is Principal & Interest + Mortgage Insurance, does not include amounts for taxes and insurance premiums. Interest rates for the program are subject to change.)
Equity Resources would give you a gift for the down payment of $9,000. This means ZERO cash is needed for down payment at closing!
- 1-Unit Single Family Homes (no condos)
- 15 or 30 years Fixed Rate Mortgage
- 3% Down Payment – Paid by Equity Resources as a Gift at Closing
- Discounted Private Mortgage Insurance (PMI) that can be cancelled after the Loan To Value (LTV) reaches 80% or below
- Maximum debt payment-to-income ratio 43%
- Minimum credit score 660
- First time home buyers and repeat home buyers
- Home buyer education requirement ONLY if ALL borrowers on the note are first time home buyers. Course provided online and free.
- Income limits do apply based on property address. Many areas are designated with no income limit.
Down Payment Gift Program Helps With Student Loan Debt
For the first time in many years, Home Buying is the number one goal for many Americans under the age of 34. According to the National Association of Realtors, millennials made up 35 percent of all buyers in 2015. This is a significant trend, and one that could be affected by the fact that many of these first time home buyers also carry student loan debt.
In fact, many economists are only now understanding that student loan debt may be the biggest problem facing this group, as they are successful in finding jobs. During the great Recession, many Millennial first time home buyers opted to obtain advanced degrees, as there were few jobs for them available. As a result, millennials are now facing more than an average of $37,000 each in student loan debt.
The Equity Zero Down Payment Gift Program addresses this issue. Unlike traditional, Government backed loans that require us to qualify the borrowers with 1% of the student loan debt balance… Equity Zero allows us to follow the traditional Freddie Mac Guidelines regarding IBR and other variable payment options for Student Loan Payments.
Here’s another benefit of using Freddie Mac… Potential homeowners can qualify if their over all debt to income ratio is below 50% with Freddie Mac. That’s not set in stone, but if you have good credit, and job history, the Freddie Mac “Automated Underwriting System” allows us to go well above the Fannie Mae hard limit of 45% or less in North Carolina. NCHFA Down Payment forgivable second mortgages currently carry a hard total DTI of 41%!
How does the way student loans are calculated effect purchasing power?
We met with borrowers this morning who have good credit, and a pile of student loan debt. We could qualify them for $100,000 USDA Home Loan with no down payment – or $199,000 house using the Freddie Mac program. Now they don’t have to come up with a down payment of 3% for the larger house… but, with this taken care of, they were able to buy twice the house because of how Student Loans are viewed by each Agency.
The rate for this program is very competitive to the NCHFA programs, however this program is ONLY available through our company. This loan, as with the other loans we are discussing here, are focused on those who have not owned a home in the past 3 years, and who will be owner occupying the property. The minimum credit score for this loan is 660.
In addition to the Mortgage Interest Deduction, first time home buyers in NC (meaning anyone who has not owned a primary residence in the last 3 years) can qualify to receive up to $2000 in Mortgage Tax Credits. These credits come directly off of the Federal Taxes you owe, and do not replace, or diminish your ability to also tax your tax deduction for Interest Paid.
The Mortgage Tax Credits in NC are applied for with your mortgage – so you must work with a lender who offers the program. You can’t buy a house, and then apply for the program.
If you miss this initial offering there are multiple other down payment assistant programs available in NC. Unlike many other loan officers who might do 3 or 4 first time home buyer loans a year, our office focuses on this first time home buyer business. REMEMBER we are the ONLY company offering the Down Payment Gift Program, Equity Zero in NC. Please call Steve and Eleanor Thorne 919 649 5058.
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