Programs that work with down payment assistance (DPA) have been around for years, but DPA program availability has not been as plentiful as it is right now. Prior to 2021, funding for state and county DPA programs was minimal if any. But wholesale mortgage companies did have proprietary down payment assistance that didn’t depend on state and federal budgets, and because of this, these programs became very popular. Currently, most state and federal DPA programs are funded and the increased variety of these programs along with proprietary wholesale mortgage DPA programs are especially beneficial to licensed mortgage brokers who can use all of these programs.
Still, as I talk to loan originators, negative perceptions of DPA programs exist. Why are loan originators often adverse to originating loans that include down payment assistance? Here’s a list of reasons, and why these reasons can be overcome.
✓ Federal Housing Administration (FHA) Housing and Urban Development (HUD) income limits
✓ Fannie Mae Area Median Income Lookup Tool
✓ Freddie Mac Home Possible Income and Property Eligibility Tool
Please note that you may need to insert an address to pinpoint income. Some programs base income on total family size while others base income on the homebuyer qualifying for the mortgage.
The Clients2Homeowners website was made with the initial purpose of introducing loan originators, realtors and prospective homebuyers to the services of HUD-approved housing counselors who help clients who are getting “mortgage ready”, throughout the process of purchasing a home, and even with post-purchase issues. Resources to help prospective homebuyers include information about down payment assistance, credit help (NO, not credit repair! And YES, building credit and help with student loans!), home budgeting, and how to find a HUD-approved counselor for what is needed.
Especially now in this sellers’ market, utilizing down payment assistance can be a benefit for loan originators. There are even DPA programs that allow renovation.
Are you ready to claim your DPA? See if you are eligible by finding a DPA program for you!