HOME BUYERS - Limited Time for Down Payment Assistance Programs

No matter which category you fall into – thinking about moving, wanting to move and but still looking for the perfect home, or ready to move and have the perfect home picked out – this information affects you!

In the past, having the money saved up for a down payment was not overly crucial. For many years there were loan programs which allowed you to borrow the entire amount of money needed to purchase the home (100% loans). This minimized the need for a down payment as you could borrow the full amount you needed to buy the house. Last year 100% loan programs went away.

Currently there are loan programs that allow you to borrow 97% of the purchase price of the home. That means that the other three percent is needed for a down payment on the home to qualify for the loan. Currently there are many ways to arrive at the 3% down payment. A very popular way is to ask the seller of the home you are buying to pay the 3% on your behalf. However, the seller cannot just give you the 3% for the down payment - so there are programs/organizations that focus on passing the money from the seller to the buyer (while keeping a part of the money for their service.) These down payment assistance programs are going away October 1, 2008.

The programs do not end until October 1st but that date is a little misleading. October 1st is the last date available to close on a house using seller funded down payment assistance. It takes 21-30 days to close on a house after all contract negotiations are agreed upon between the buyer and the seller. It can take 1-2 weeks for negotiations depending on how ‘good’ the original offer is (ie offer price as compared to list price, amount of help from the seller for down payment and/or closing costs, etc). With that being said, to utilize the down payment assistance programs, you should really aim for being under contract by early September.

For more information, please call our office. We would love to work with you in finding the perfect home, negotiating the offer and getting you to the closing table. Time is of the essence if you want to utilize the down payment assistance programs that are set to expire on Oct 1, 2008.