Down Payment Assistance Grant
The earlier article which gave notice that the seller funded downpayment assistance programs could very well be coming to and end is still on track. However here is a new program that has the blessing of HUD (The Department of Housing and Urban Development). Simply stated the program is a 5:1 downpayment grant. What this means is that for every dollar that the buyer puts towards the purchase of their home it will be matched 5 times, up to a maximum of $10,000.00.
|
Borrower Funds Contributed |
Grant Amount |
|
$500 |
$2,500 |
|
$1,000 |
$5,000 |
|
$2,000 |
$10,000 |
The grant is handled in the form of a second lien with no monthly payment and is forgiven after 5 years. If the homeowner sells the home prior to the end of the five year period the grant is to be repaid as a percentage of the time the home was occupied. For example if the property sells in 2-1/2 years and the grant was for $5,000 then the seller would have to pay $2,500 of the grant back.
There are some income qualifications that are required to participate in this first time buyer program and it only pertains to primary residences. At the time of enrollment the household income for all parties living in the home must be considered to determine qualification. The maximum allowable household income, determined by family size for the Metro Atlanta area is as follows:
- 1 person = $39,840
- 2 person = $45,550
- 3 person = $51,250
- 4 person = $56,950
- 5 person = $61,500
- 6 person = $66,050
- 7 person = $70,650
- 8 person = $75,200
Normal FHA guidelines apply to the first mortgage and after it is underwritten the loan must also be approved by Federal Home Loan Bank. Here are some of the highlights about this exclusive first time buyer grant:
- Secured second mortgage up to a maximum of $10,000 that if forgiven after 5 years if the borrower still occupies the property.
- No monthly payments are due on the second mortgage.
- Up to 6% seller contributions towards closing costs are allowed.
- Home Buyer education by a HUD or FNMA Certified Counselor is required.
- No additional fees are required
For an in depth consultation to determine how this program can benefit you, contact Mack.
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3 Responses to “ Down Payment Assistance Grant ”
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Hi Mack,
Great info! Could you send me a link of where you read this information?
Thanks!
Hi Will,
This is a program that one of the investors that Five Star Mortgage in Duluth Georgia has. You could maybe find out from Sandy Dunn at 770-495-3608.
The following link gives more information on this program: http://corp.fhlbatl.com/documents.aspx?id=544