Tuesday, October 11, 2016

Down Payment Assistance Programs

Now is a great time to buy a home.  Interest rates are low and depending on your debt-to-income ratio, your credit score, and other earning and buying criteria, you can get 3-4.5% down payment help.  When you are looking to buy a home it's so important to explore your options to find the loan that best fits you.

Below are the bullet points on a Down Payment Assistance Program sent to me by Brandon Trippett at Movement Mortgage:

·         30 year FHA fixed rate loan combined with a non-repayable grant/gift for Down Payment Assistance (DPA) of either 3% or 4.5% of the first lien note amount depending on interest rate option selected.
·         Assistance can be used to cover down payment, closing costs, and/or prepaid items.  No portion of Assistance grant can be paid to borrower – however applicant can be reimbursed for their documented Earnest Money Deposit (EMD) contribution at closing.   Any excess funds should be handled as reduction to loan amount.   
·         Purchase loans only
·         All applicants have a credit score of 660 or higher based on a credit report obtained within the past 27 days
·         DTI ratio in PCL is 43% or less
·         Purchase transaction for primary residence
·         There are not any previously approved DAP programs that can be combined with an in-house Movement Mortgage first lien product available to meet the down payment and/or closing cost assistance needs of the customer. 

Preliminary Rates
NHF Sapphire rates generally are not volatile, with rates observed to remain at  the same level for extended period of times.  Following are preliminary rates as of date of publication of this Guide for Sapphire loans:
Grant %
Interest Rate
Sapphire rates are subject to change.
·         Loans under this program CANNOT be locked until after Final Approval is received and loan is in “Clear To Close” status.
·         Maximum rate lock period available to projected closing date is 30 days.    Do NOT lock loan too early in process given limited opportunities for modifications to existing locks & cancellation fees.
·         Expectations for turnaround times are not to exceed 21 days from submission. 
Acceptable Property Types
New or Existing Construction homes with following property types:
·         Single Family Detached or Semi-Detached
·         Townhomes
·         Condos (projects must be acceptable to FHA and LHFS)
·         2-4 unit properties
Ineligible Property Types
·         Co-Ops
·         Manufactured Homes
·         Properties Requiring Rehab / 203k loans
·         Properties Requiring Escrow Holdback¹
¹ Movement Mortgage overlay
·         Primary residences only
·         Purchase transactions only
Home Inspection
·         Not required under program.   
Eligible Homebuyers
·         Both First Time Homebuyers (FTHB) and Non-First Time Homebuyers (NFTHB) are eligible
Home Buyer Education
·         At least one borrower must complete the MGIC Homebuyers Education course
Income Limits
·         Income limit evaluated based on 1003 Credit Qualifying Income
·         Income Limit of 115% of Area Median Income (AMI)
·         Income Limit varies by County. 
Co-Signers &
·         Co-signers and non-occupant co-mortgagors not permitted
·         All borrowers must occupy property as primary residence.
Minimum Credit Score
¹Movement Mortgage overlay requires minimum 660 score on bond program loans including this broker-out bond product given reps & warrant risk on EPDs
Other Credit Items
·         Borrowers in multiple year repayment plans for federal or state taxes for the immediate 3 years prior to application date are not eligible unless debt paid in full prior to closing.
·         Payment plans for IRS obligations are not acceptable.
·         Paying off debt to qualify is not allowed
·         No outstanding collections, including repayment plan.  All outstanding collections must be paid in full.
·         No outstanding judgments, including repayment plan.  All outstanding judgments must be paid in full.
·         Chapter 13 bankruptcies must be fully discharged
Maximum DTI Ratio
·         43%¹ maximum DTI with AUS approval
¹Movement Mortgage overlay requires maximum 43% DTI on bond program loans including this broker-out bond product given rep & warrant risk on EPDs
Maximum Loan Amount
·         The lesser of $417,000 (not including UFMIP) or FHA maximum for county.
Ownership of Other Property
·         Borrowers may not own other residential properties at time of closing

Contact Brandon with questions: 
Office: 240-925-3489
      Cell: 240-925-9870

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