Down Payment Assistance Program – Boost Homeownership Opportunities!

In today’s competitive housing market, a down payment assistance (DPA) program is more crucial than ever for helping clients overcome financial hurdles to homeownership. Whether you’re working with first-time homebuyers, low- to moderate-income families, or clients with less-than-perfect credit, DPA programs can unlock their dream of owning a home.

In this concise guide, we’ll explore the latest DPA offerings, key features of FHA loans, and how to leverage repayment options to boost your clients’ success.

 The Latest DPA Offerings – What’s New?

• The landscape of down payment assistance is continually evolving, with new programs designed to better meet the needs of today’s homebuyers. One of the most exciting recent developments is the 5% Repayable Down Payment Assistance option for FHA loans. This new offering provides a significant boost to homebuyers who qualify for FHA financing, giving them the flexibility to cover a larger portion of their down payment.

  Key offerings include:

  • 3.5% DPA: Available for Conforming or High Balance Loan Limits
  • 5% DPA: Available for Conforming Loan Limits and FHA Only
  • Forgivable Second Lien: 30-year term with a 0% rate; forgiveness after 60 on-time payments on the 1st mortgage
  • Buydown Options: 2/1 and 1/0 buydowns to reduce interest rates for the initial years

Key Features of FHA DPA Programs – What Realtors Need to Know

When it comes to down payment assistance, FHA loans are a cornerstone for many homebuyers, particularly those with lower credit scores or limited savings. Understanding the key features of FHA DPA programs will enable you to guide your clients more effectively.

Important features include:

• No Income Limits: FHA loans are available to a broader range of clients
• Minimum Credit Score: 580 for FHA, 640 for USDA
• Manual Underwriting Allowed: Flexibility for clients with unique financial situations
• DPA Options: Forgivable or repayable second lien
• Gift Funds Allowed: For down payments and closing costs
• Non-Occupant Co-Borrowers Allowed
• First-Time Homebuyers Allowed, but Not Required

Boosting Your Clients' Success – How to Leverage Repayment Options

One of the critical factors in successfully utilizing down payment assistance is understanding the repayment options available to your clients. These options can significantly impact your clients' financial planning and long-term homeownership success.

Key repayment options include:

• Repayable 2nd Lien: 15-year term with a rate 2% higher than the 1st lien; buydown available to match the 1st lien
• Forgivable 2nd Lien: 30-year term with 0% interest; forgiveness after 60 on-time payments on the 1st mortgage

By understanding these options and clearly explaining them to your clients, you position yourself as a knowledgeable and trustworthy advisor, helping your clients make informed decisions that align with their financial goals.