***** UPDATE****** NC Offers a 3% down payment assistance to those who qualify, and can be used with a USDA Home Loan, FHA, Home Loan for a Veteran or a Conventional Loan. (Down Payment Assistance Programs) There are no more DAPs that were part of the HR6694 program described below, we are leaving this information up in the event a similar program is re-instated, or in the event someone has one of these loans, and wants to understand if there’s a re-capture.
According to the National Association of Realtors today, the Downpayment Assistance program that is being cutoff October first might squeek it’s way back in.
Downpayment Assistance Programs (referred to as DAPs or DPAs depending on which part of the country you’re in) allow a seller to “gift” the downpayment to the borrower. There’s a charity involved, and a fee paid, and the house has to be able to appraise for the full amount. In many cases this is one of the few ways someone with nominal funds can afford to purchase a home. It normally takes total funds of around 5% to purchase a home (downpayment and closing costs). Some of the closing costs might be paid by the lender or the seller – but if you figure on 5%, you’ll be okay.
Well, with gas prices jumping, it can be difficult to save! Here’s part of what NAR said:
“In an attempt to “mend, not end” the use of seller-funded down-payment assistance, HR 6694 would tie its use to borrowers’ credit scores.
Those with credit scores of 680 or more could continue relying on seller-funded gifts for FHA-backed loans and would be treated like other borrowers. Those with scores between 620 and 680 could use the gifts, but could pay higher FHA insurance premiums. The gifts would be off-limits for borrowers with scores below 620 until at least mid-2009, when the Secretary of Housing would be permitted to expand the program if it could be done without requiring taxpayers to subsidize FHA’s insurance fund.”