Down Payment Assistance Programs
Has anyone ever heard of down payment assistance programs? I have been looking into one called Home Purchase Assistance Fund in which you are awarded a grant toward the purchase of a home. The seller has to pay a processing fee of $500 plus $35 wire transfer fee. They also ask for the seller to make a contribution. Is this legit or does anyone know of a grant program that is legit?
There are many programs like this. But generally, they are for low-income individuals, low-income families, etc. and of course, they require owner occupancy for a certain period.
Yes they are legit you just have to make sure your lender accepts these types of gift which many do. There are many organizations that have these programs. This is essentially seller concessions.
The company wires the funds to closing agent with the agreement that the seller will reimburse the existing fund plus their fee after they close on the property.
Anyway totally legit as a broker we use it all day long when buyers don't have closing costs or the downpayment or both for that matter. It basically gives more people the opportunity to own real estate who would not have been able to do so or perhaps they would have to wait until they saved enough.
Master the use of DPA programs and you will be a happy camper.
Do a search for homebuyers assistance because fees vary by organizations?
YOu can do an internet seach for "downpayment assistnace", and find several program.
One that I have known others to use is the Nehemiah Program.
Good Luck!
Thanks, that did help some. I also found a pretty helpful article on the Federal Reserve site today.
The Linked Deposit Loan works like this in Illinios. The treasurer of the State of Illinois deposits some of their "float" money in a FDIC insured bank at a low rate of interest. In return the bank makes a loan to a project with "community benefit" also at a preferred rate of interest.
But the kicker seems to be these fractional reserve banking rules. After having made the loan the loan then becomes an asset of the bank which means that it can count toward their assets and (with a 10% reserve) the bank can lend the money again. In other words: with a $1million deposit the bank could generate about $8 million in loans thereby generating fees on all those loans which make the program very attractive.
I think, but I have to talk to my friend in the treasurers office again to make sure I actually understand how this works.
Again, anybody who actually understands this stuff, I'd be grateful for any help.