Truth About Down Payment Assistance : For A First Time Home Buyer

Today we look at the truth about down payment assistance for a first time home buyer! Are down payment assistance programs a good way for a first time home buyer to buy a house? or should a first time home buyer avoid down payment assistance programs and explore other routes? Lets take a look at the different types of down payment assistance programs and some pros and cons of the down payment assistance programs, because not all of them are created equal! We'll learn the truth about down payment assistance!

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Types of down payment assistance:
Grants- These are non-repayable, truly free money down payment assistance programs that are directed to lower income borrowers and minority borrowers!

Low interest loans- These are second loans that are repayable while repaying your mortgage so you will have 2 different monthly payments. One for the mortgage amount and one for the amount of the down payment assistance and closing costs.

Deferred Loan- These are loans for the down payment and closing cost, but you have to repay it when you sell you home, refinance your home or when the 15 year mortgage, 20 year mortgage or 30 year mortgage term is up!

Forgivable Loan- A forgivable loan is a type of down payment assistance that is forgiven without you repaying it, but you have to stay in the property for a certain amount of time (usually 5 years) and you have to pay your mortgage on time each month, or it can be due in full!

[MrCucamonga]

Good video. I'm a loan officer of 23 years and I have personally seen DAP's (Down-Payment Assistance Programs) become less and less beneficial over the years. I will say that we work in a very litigious industry, so you have to be weary of proclaiming something a scam when it isn't. Most of these DAPs are pretty clear on the terms up front and go to great lengths to make sure the buyer knows what they're getting themselves into. However, some unseasoned or less-than-scrupulous loan officers will fail to point out all the potential pitfalls of a DAP because they just want the buyer to say "yes" in order to close the loan and get paid. It pays to do your homework and make sure you're dealing with someone who knows what they're doing.

One of the other points that would be considered a con of a DAP is that many people go the FHA route when using a DAP. One of the great features of an FHA loan is what's called an FHA Streamline. This is where you can refinance into a lower rate (should the market conditions exist for this) without needing an appraisal or any sort of income documentation. It is a very simple refi and was hugely beneficial back around 2012 when a lot of people owed more than the house was worth and didn't qualify for the HARP program. However, when you have a deferred loan on the back end of your main mortgage, this has the potential to disqualify you from being able to do the FHA streamline, depending on the terms of the DAP. I'm not a big fan of DAPs. But for some, it's the only way to get them into a home. It's important they know the pros and cons. Again, great video. Thank you.

[brendatomlinson]

I’m just beginning my journey of learning about down payment assistance. This video is very informative. I’ll check out your links. Thanks so much!

[longshotin]

Thank you that was very helpful. I didn't know I would be a first time home buyer since it's been longer than 3 years since I originally bought. I lost my first house because of my job and yadda yadda but in a much better position now.

[c_low_da_wrk]

Great video. Very informative. Im looking to
Purchase my first home, but saving 4 thousand plus dollars for a down payment is not as easy as one thinks nowadays. Grants and home loans are a positive outlook with a few added thousands to help purchase.

[Deede]

Thanks for Cons and Pros so appreciated 👍🏽

[omarkhanlilcurry]

Thank you for this video !! I’m looking at using Utah’s first time home buyer or colorados

[Melodicluis]

Very helpful & clear to understand. Thanks a lot

[greeny]

You can use it for a rental, however you need to live in one portion of it for I believe the first two years

[atravellingsheep]

I'm confused. Can you just use every single "DHA" you qualify for together during a purchase?

[LOS._]

So help me clarify.... Im not allowed to use the DPA on a house that my mom would live in and pay me rent correct?

[davidvazquez]

Would you be able to rent out the property after living a certain amount of years as a primary resident ?

[reallife]

Please help I just called to finishing paying my house, now they telling me I have to finish paying my assistance that I used for closing cost. I can believe that, that is 30 years and pay it full after 10 years. I don’t have that more to put down on that assistance what can I do no. I have a principal balance of 3000,

[ingridlorenasierra]

Thank you for this video 🙌for downpayment assistance, is it better to go with an approved lender from my country website or can any local lender access these funds?

[FlowPhase]

I heard that this was recently closed. What do you think?

[mogo]

The subscribe button is Black…. Should I be worried?😮