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| Down Payment Sources |
There are more homes on the market now, but at the current price point in Southern California, the ability of many buyers to buy is hindered by not enough funds to close escrow. First of all, a 20% down payment is not a requirement to buy. (see below**.) There are loan programs such as FHA and VA which allow for 3.5% down payment or less, plus FHA 30-year interest mortgage rates are usually an improvement compared to conventional loan rates.
Then, various banks such as BMO, Citibank and Chase offer down payment assistance programs, or grants to 1st time buyers, and these aren't the only sources. Some do have income level requirements (BMO allows a total of $213,000 annual income). There are also programs for DACA recipients. It pays to look into these programs, because it may make the difference on whether you buy or not.
An important tool is the Down Payment search tool which allows for the input of a certain address, then asks for the type of property of interest, then general questions about income and if you're a veteran, before moving on to more details. This does not take the place of a loan qualification, but is designed to inform a buyer about potential opportunities. To find out specific programs based on your information, it does require input of name and phone or email and whether or not you're working with an agent. While some people are reluctant to give that out, you're not required to keep receiving information, please read their privacy policy. Because I'm an agent, the system emailed me the following linked programs based on an $899,000 single family listing in Long Beach, and $100,000 income, and will also send you as the enquirer the same information:
CBC Mortgage Chenoa Fund - FHA Forgivable DPA
Combined Assistance, up to $44,950 (5% of Purchase Price) in assistance
CBC Mortgage Chenoa Fund - FHA Repayable DPA
Combined Assistance, up to $44,950 (5% of Purchase Price) in assistance
National Homebuyers Fund (NHF) - Data Mortgage, Inc. dba Essex Mortgage 10 Year Amortized 2 Plus
Combined Assistance, up to $44,950 (5% of Purchase Price) in assistance
National Homebuyers Fund (NHF) - Data Mortgage, Inc. dba Essex Mortgage Forgivable/Deferred Program
Combined Assistance, up to $31,465 (3.5% of Purchase Price) in assistance
Golden State Finance Authority (GSFA) Golden Opportunities Program
Combined Assistance, up to $42,702 (5% of Total Loan Amount) in assistance
Golden State Finance Authority (GSFA) Platinum Assist To Own - Conventional
Combined Assistance, up to $42,702 (5% of Total Loan Amount) in assistance
Golden State Finance Authority (GSFA) Platinum Down Payment Assistance - Government
Combined Assistance, up to $42,702 (5% of Total Loan Amount) in assistance
Golden State Finance Authority (GSFA) Platinum Down Payment Assistance Program - Conventional
Combined Assistance, up to $42,702 (5% of Total Loan Amount) in assistance
Golden State Finance Authority (GSFA) Platinum SELECT Down Payment Assistance - Government
Combined Assistance, up to $42,702 (5% of Total Loan Amount) in assistance
Golden State Finance Authority (GSFA) Platinum SELECT Down Payment Assistance Program - Conventional
Combined Assistance, up to $42,702 (5% of Total Loan Amount) in assistance
This information is then forwarded on to the prospective buyer. If you wish to find out more sources, just use the form and I would be happy to send you a list such as this for you to use at your discretion. The results will depend on area or city, income, credit score, how many buyers, or if you currently rent or own. Not all lenders work with all programs, and you always have the option of contacting a loan officer to inquire about their programs. But using this tool gives you an overview of multiple sources before you shop.
The important thing to know is, there may be an option for you, so don't be afraid to start searching.
**Nearly 1 in 2 buyers made a down payment of 10% or less. In the meantime, less than 30% of buyers made a down payment above 20%, often repeat buyers using equity from previous home. Smaller down payments are the norm, showing how buyers are adapting to today's affordability challenges while still becoming homeowners. The idea that you need a 20% down payment is one of the biggest myths in real estate."
Julia Huntsman, REALTOR, Broker | http://www.abodes.realestate | 562-896-2609 | California Lic. #01188996
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