Down Payment Assistance Programs

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Many people have the cash flow to make a monthly mortgage payment, but can’t seem to scrape together the funds it takes for the down payment. Long gone are the days of no money down! If you find yourself in this situation, then you might consider one of the following programs that will help you with your down payment. Washington DC, Maryland and Virginia all offer various types of assistance for home buyers. Maybe one will work for you!



Washington DC

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Washington DC’s program is called the Home Purchase Assistance Program (HPAP). They provide:

  • Interest free loans
  • Closing cost assistance


HPAP provides a maximum of $80,000 for down payment assistance and an additional $4,000 in closing cost assistance, depending on factors such as:

  • Income
  • Size of Household
  • Assets



If your income is less than 80% of the area median income (AMI) the loan repayment is deferred until the property is:

  • Sold
  • Refinanced
  • No longer the owner’s primary residence


If your income is 80%-110% of the AMI then the 0% interest loan repayment is:

  • Deferred for 5 years
  • Recipients then have 40 years to pay off the principal of the loan


For more information visit their website. 

https://dhcd.dc.gov/service/home-purchase-assistance-program-hpap


Maryland


Maryland’s program is called The Maryland Mortgage Program (MMP). It is more robust in its offerings, but a bit more complicated. It features three parts:


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  1. Down Payment and Closing Cost Assistance
  2. Home Loans at Competitive Interest Rates
  3. Homebuying Classes

Down Payment and Closing Cost Assistance


Maryland offers 2 types of loans to assist with your down payment and closing costs. The first is a 0% interest deferred loan which is due upon the sale or transfer of a property, if the home is refinanced or if it’s paid in full. The second type is a forgivable loan. The amount owed diminishes over time. Each year you stay in your home the amount due decreases. If you stay all of the agreed time frame, then $0 of the loan is o.


Home Loans at Competitive Prices


Maryland is able to offer slightly lower rates than banks and other lenders. Check out their current rates here:  http://mmp.maryland.gov/Pages/Interest-Rates.aspx


Homebuying Classes


The classes are a required piece of qualifying to receive down payment assistance and additional help. They are offered through various approved entities as well as online. You can find the approved list here: http://mmp.maryland.gov/Documents/Homebuyer_Education.pdf

If you're worried about being taken advantage of by a lender, then these classes will educate you to prevent you from entering into a mortgage that isn't a good fit.


Maryland has eligibility requirements based on household income. Find out if you’re eligible here: http://mmp.maryland.gov/Lenders/Pages/Income-and-Purchase-Limits.aspx


Your income will dictate the price of home you can qualify for assistance with depending on where in the state you’re looking. Other factors they consider for eligibility are:

  • You are a first time home buyer, or haven’t bought a residence in the past 3 years
  • Will be your primary residence
  • Your liquid assets are less than 20% or more of the purchase price


For more information about Maryland’s program as a whole visit their website at http://mmp.maryland.gov/Pages/default.aspx



Virginia


Virginia’s program is call the Virginia Housing Development Authority (VHDA). They offer down payment assistance that:

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  • Does not require repayment if you work with an
      approved lender to determine your eligibility
  • Can only be used with eligible VHDA loans
  • Is 2%-2.5% of the purchase price
  • Can not be used in combination with other
      assistance resources


Their eligibility is based on:

  • A minimum credit score of 620 FHA or 660 Fannie Mae
  • Less than 45% debt to income ratio


For more information and to find a list of their approved lenders and loans visit  

http://www.vhda.com/Homebuyers/Pages/homebuyers.aspx#.WRymUxPyuT9


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If none of these are attractive to you or are too much work, we have great working relationships with several lenders that may be able to offer you something that requires less money down than you were expecting. It’s important to know this piece of the puzzle before beginning your search. Local lenders are a wealth of knowledge and can give you the confidence you need to move forward on your home buying process. Give us a call and we’d be happy to share them with you.

Rhonda Mortensen
Rhonda Mortensen
Sales Executive