Down Payment Assistance

[MrMortgage]

I thought I should post a new thread and let everyone know that I'm allowing Down Payment Assistance on FHA Purchases. If you have a DPA provider that you normally use then contact me and I'll let you know if they are on our approved DPA provider list.

[Tbaskew]

I thought DPA programs were dead?

[MrMortgage]

Not necessarily. For instance in TN the Chattanooga Neighborhood Enterprise Affordable Housing Assistance is still alive. Unfortunately, I don't lend in Tennessee. But we are doing a number of DPA's currently. They just have to be HUD approved.

[Tbaskew]

Thanks for the heads up. I will do a little more research on this.

[Business with Greg]

Anyone is allowing HUD approved Down payment Assistance on FHA.

I think the better story is where you can find acceptable programs.

You should contact your county and ask for the division that handles real estate grant funds. This is usually planning and economic development or something labeled similar in nature. Each state also has a master program available statewide that can be used in combination with an FHA loan. For example: Ohio Housing Finance Agency (OHFA).

The county funds is where I would start first. Sometimes these funds are available for down payment and rehabilitation. This program is commonly referred to as a Community Block Grant. Typically it allows up to $35,000 total with a maximum of 10% of the purchase price up to $5,000 to be used for down payment.

Usually the State or County programs put a 2nd lien on your home. It is 0% interest and requires no monthly payment. A portion is forgiven every year for 10 years until 15% of the original amount remains. You only need to pay back the money if you sell the home, or in some cases refinance.

[MrMortgage]

It is true that I am not the only bank that will allow Down Payment Assistance through a municipality or HUD approved agency. There are some banks that do not allow Down Payment Assistance on FHA loans. My niche is that I'll allow down payment assistance and I'll do it for a borrower with a 600 score or that is 12+ months out of a Chapter 7 Bankruptcy, or that has a 55dti (approve/eligible in an AUS), or on a file that has to be manually underwritten.

[Business with Greg]

There you go. That is a rare thing to be able to offer these days.

What other types of down payment assistance are you using?

[MrMortgage]

You explained the DPA's perfectly in your post. I'm working with quite a few brokers in Ohio right now and they are using the "afford a home". It's an up to $20k 2nd lien. The payment is deferred. I get a lot of business from them because they were having a difficult time finding a bank that would do that particular program with credit that is little dinged up. As long as it is HUD approved we will normally do it.

[Business with Greg]

Do you have a url for that program? I will never find it on a google search lol

[MrMortgage]

They are on the HUD site. I was having a bit of difficulty finding them myself. I do have a direct contact for you. email me at wades@usmfc.com and I can give you the agency contact phone number for Afford a Home.