Down Payment Assistance(DPA)
Do you know that there are many ways where the down payment can come from? The down payment can come from federal, state and county programs, or from relatives or even close friends, while sometimes can come from assets you don't even know you have. Some of the programs are available for First Time Home Buyers(FTHB) only, while others apply to anyone. An FTHB is anyone who has not owned a house during the past three years.
Following is a summary of some of these programs:
- Gift from relative or even a close friend - the down payment(3.5 percent ) could come by way of a gift from a relative or even a close friend. Should it be a close friend, proof would have to be submitted of the friendship by way of yearbooks, wedding photos, and others. Whether a relative or friend, a letter would have to be drafted stating that the money is a gift AND NOT a loan.
- Funds from a 401K - some companies allow for withdrawals under certain circumstances from the employee's 401K even while he/she is still employed. Check with your company to verify this. If you are no longer employed with them, you are eligible to retire those funds for whatever reason subject to IRS penalties and tax regulations. However, even if you are still employed with your company in most cases you are allowed to take a loan against your 401K. Just keep in mind that in this case we have to take into consideration your new monthly payment on this loan along with your other obligations for qualification purposes. Please consult a tax advisor before you make any decisions regarding your 401K.
- Federal/State Programs - these are programs available for FTHB's in the way of subsidies. Depending on your combined salary and your debt to income ratios you could qualify for anywhere between $10K to $100K in subsidies. This money does not have to be paid back so long as you live in the house. If you sold the house, rented it, or defaulted, it would become due. It would totally be forgiven if you lived in the house for 30 years. We work closely with different governmental and city entities with different qualifying criteria. Please fill out the Basic Pre-Approval form to find out what programs apply in your area.
- We also offer Firt time homebuyer seminars wich offer a wealth of information on this topic and others, click on the attached or check on our blog for the latest dates on the seminars in your area.