Homeownership is an exciting milestone, but the down payment can often be a significant hurdle for many prospective homebuyers. That’s where our down payment assistance program comes into play. This programs is designed to bridge the gap and help make homeownership accessible. Here’s what you need to know.
Amres’s Down Payment Assistance at a Glance:
| Minimum Credit Score | 600 |
| Minimum Down Payment | 0% |
| Max Loan Amount | $472,030 |
| Max Debt-to-Income (DTI) | 56.99% |
Table of contents
What Is Down Payment Assistance?
Down payment assistance (DPA) is financial support to help homebuyers cover the initial costs of buying a home. With down payment assistance, you can become a homeowner with no down payment!
Amres’s Down Payment Assistance
Our down payment assistance comes in the form of an FHA 1st mortgage for 96.5% of the home’s value and a 2nd mortgage to cover the remaining 3.5%. There is also an option for a combined loan-to-value of 101.5%, where the 1st mortgage is 96.5% of the home’s value and the 2nd mortgage is for the remaining 5%. Both options can be either repayable or forgivable.
Repayable
The 2nd mortgage will have a 10-year term with an interest rate 2% higher than the interest rate on the 1st mortgage. Both liens require a monthly payment.
Forgivable
The 2nd mortgage will have a 30-year term with an interest rate of 0% (0% APR). The 2nd mortgage does not require a monthly payment. The terms of forgiveness depend on the DPA amount as follows:
- 3.5% Forgiveness: Achieve total loan forgiveness of your 2nd mortgage upon making 36 consecutive, on-time payments on your FHA 1st mortgage. A late payment will reset the forgiveness timeline. If there is a late payment, the loan still has the opportunity to be forgiven after 36 more months of consecutive on-time payments. An alternate route to forgiveness is possible at the term’s end if the initial conditions remain unmet.
- 5% Forgiveness: After 120 on-time, consecutive payments on the FHA 1st mortgage, the 2nd mortgage is forgivable. However, be aware that a payment delay of 60 or more days terminates the opportunity for forgiveness until the loan is carried for the full 30-year term. If this happens, the loan will remain with the 0% interest rate (0% APR) and the 30-year term with no monthly payments.
Both forgivable options hold the potential for complete forgiveness at the conclusion of the 30-year term, irrespective of any payment delays encountered of the FHA 1st mortgage. It’s important to note that, if not previously forgiven, the loan requires repayment upon the change of ownership or during refinancing.
Advantages of Amres’s Down Payment Assistance Program
Down Payment Assistance improves access to homeownership for those who need it most. There are a lot of DPA programs out there and some of them can be very restrictive in their eligibility guidelines. That is where Amres’s DPA program has some advantages. Some of these advantages include:
- No First-Time Homebuyer Restrictions: Even prior homeowners can qualify for down payment assistance.
- No Income Limitations: Whether you have low or high income, you may still be eligible for down payment assistance.
- No Property Location Restrictions: DPA programs are often reserved for properties in rural or low-income areas. Our DPA is available for properties in any location. The exception to this is New York state, where it is not available.
Other Types of Down Payment Assistance
In addition to the DPA program described above, depending on your location, there may be state and local government or non-profit programs available. Each program has its own unique guidelines. Contact us and we will help you find the DPA that works best for you.
Eligibility Guidelines for Down Payment Assistance
Down payment assistance can make your dream of homeownership attainable. While our DPA is one of the most accessible DPAs out there, it isn’t available for everyone. DPA programs, designed to provide an easier route to homeownership, have specific guidelines that applicants need to meet. Here, we break down the eligibility guidelines that prospective homebuyers should be aware of:
- Credit Score Requirements: A decent credit score showcases your financial reliability. While the exact score can vary between programs, a good credit score can potentially open doors to various assistance opportunities.
- Occupancy Requirements: Many programs stipulate that the buyer must intend to use the property as their primary residence. However, we do allow non-occupying co-borrowers.
- Homebuyer Education: Applicants may be required to complete a homebuyer education course, empowering them with knowledge about the various facets of the home-buying process.
- Debt-to-Income Ratio: Certain programs evaluate the applicant’s debt-to-income ratio to assess their ability to manage the additional debt responsibly. A lower ratio indicates a more favorable financial position.
- FHA Guidelines: Our DPA program relies on an FHA 1st mortgage. Other than the DPA program’s overlays, FHA guidelines will apply.
- Payment Shock: To reduce the risks inherent in loans made with no down payment, Amres’s DPA takes payment shock into consideration. This means that your new mortgage payment cannot exceed 150%-175% of your current housing payments.
How to Apply for Down Payment Assistance
Apply Online
- Visit the website: Go to the online mortgage application portal at Amres.com.
- Complete the application: Answer some questions about your homeownership goals and personal information.
- Gather Documentation: Prepare necessary financial documents, such as pay stubs, tax returns, and bank statements.
- Loan Processing and Approval: Amres will process the loan, conduct the appraisal, and provide a decision on approval.
- Closing: After approval, you’ll proceed to closing, where you’ll finalize the loan and become the proud owner of your new home.
Apply over the phone
- Contact an Amres Loan Officer: Start by connecting with an Amres loan officer to discuss your needs and options.
- Gather Documentation: Prepare necessary financial documents, such as pay stubs, tax returns, and bank statements.
- Complete Application: Your loan officer will guide you through the application process, ensuring all details are accurately provided.
- Loan Processing and Approval: Amres will process the loan, conduct the appraisal, and provide a decision on approval.
- Closing: After approval, you’ll proceed to closing, where you’ll finalize the loan and become the proud owner of your new home.
Conclusion
Down payment assistance can be a powerful tool in making homeownership a reality. These resources are designed to support you in your homebuying journey.
At Amres, we’re committed to helping you explore all available options and find the down payment assistance program that’s right for you. Reach out to one of our experienced loan officers today, and take the first step towards owning the home you’ve always dreamed of.
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