First Time Home Buyer No Down Payment
These programs made available from both state and federal sources allow for first time home buyer no down payment assistance. Here we’ve broken down the federal DPA program along with two state-level DPAs so you can see how each works. This article describes just a few of the many available low income down payment assistance programs throughout the United States.
National Homebuyers Fund
The National Homebuyers Fund (NHF) founded as a public benefit corporation. Established in 2002 with the mission of creating programs to help with the financial burdens associated with buying a home. Under the NHF, qualified borrowers have the opportunity to take part in this down payment assistance program. Through the Sapphire Program, lenders offer assistance for 30-year fixed mortgages under FHA, VA, and USDA guidelines.
To borrowers that qualify, NHF offers grant funding ranging from 3% up to 5%. The funding range is determined on where the property is located. Also, borrowers must meet certain qualification requirements, including occupying the home as their primary residence. They must also stay within program income limits, typically no more than 115% of the area median income. In addition, a minimum credit score of 580 and a debt-to-income ratio no more than 51% is required. Borrowers must also participate in a homebuyer education course if they are utilizing the program as a first-time buyer. Borrowers are required to repay the grant amount if they do not maintain ownership of the property.
National Homebuyers Fund provides more details about lender programs.
Homeownership Across Texas (HAT)
In addition to the federal DPA offerings, several states have specific programs to assist first-time homebuyers and repeat purchasers. In Texas, the HAT program offers just that. A grant-based program through a partnership between Lubbock Housing Finance Corporation and the Southeast Texas Housing Finance Corporation.
Under the HAT program, a borrower is eligible for grant funds of up to 5% of the loan amount. Also, the property must be located in the state of Texas to qualify. In addition, the sales price must not to exceed $274,050 for government sponsored loans or $324,000 for conventional. The home must be the borrowers primary residence and comply with the program income limits.
As part of the program requirements, borrowers must participate in online educational courses. This training ensures they are informed about the home buying process . The program allows borrowers to use grant funding to assist with the down payment, closing costs, and any prepaid expenses. The borrower does not have to repay the grant amount, as long as the borrower follows the program requirements. Only fixed mortgage loans with a 30-year repayment term are available under the program.
Homeownership Across Texas provides more information for prospective homebuyers, including participating lenders.
DC Open Doors
Within the District of Columbia, homebuyers have an option to receive down payment assistance through the DC Open Doors program. Each year, borrowers receive a 20% reduction in the loan amount which carries a 0% interest throughout the five-year term. Under the program requirements, the loan must be repaid if the home is sold within five years.
DC Open Doors is available for up to 3.50% of the loan amount for borrowers who’s income is below $131,040. No sales price limitations are in place at this time. The maximum loan amount is $417,000. Government and conventional loans are available through the program. Properties can be in any neighborhood within the District of Columbia. Borrowers must have a minimum credit score of 640 a
nd a debt-to-income ratio of no more than 45% to qualify. The home purchased must serve as their primary residence.
DC Open Doors online provides additional information for first time home buyer no down payment.
Is a DPA Right for You?
When receiving down payment assistance, several considerations should be contemplated . Therefore, it is necessary to understand the limitations of the DPA program you plan to use. Most of all, credit requirements, purchase price, loan limits, location eligibility, and residency status. In addition, you should understand if DPA funding is offered as a grant or a loan. And how that affects your obligation to remain in the property.
When considering a DPA program, it is important to know if a higher rate undermines the down payment assistance up-front. Your lender will be able to provide details, both with and without a down payment assistance component. First time home buyer no down payment programs allow you to reach your homeownership dreams, without a significant out-of-pocket commitment.
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