New Down Payment Assistance Options with CHFA
There are new down payment assistance options with CHFA! CHFA is known for their down payment assistance programs as well as their specialty programs. Yesterday CHFA rolled out a change to their down payment assistance grant program and added a zero-percent second. The down payment assistance grant will now be for up to 4% of total first mortgage loan amount. The new zero-percent second mortgage is for up to 5% of the total first mortgage loan amount. This can be used for down payment, closing costs and/or prepaids.
Much or our calls come from first time home buyers. Typically it is usually these two scenarios; Scenario One: They have some money saved ($1000-3000) but because of common hurdles that life provides us, such as a wedding, a new baby, maybe even health issues, limits the funds they’ve been able to save. Scenario two: They have some funds saved and/or gifted but don’t want to deplete all their savings.
Now, both of these situations are the prime example of when down payment assistance programs can be a great option. There are positives and negatives to consider for these assistance programs, here’s is a breakdown for you to review:
- Helps offset costs for purchasing a home
- Helps leverage your existing funds saved
- Give you the ability to help purchase a home sooner versus later
- Down Payment Assistance Grant has a higher interest rate
- Zero-percent second doesn’t require monthly payments but must be paid upon sale or refinance of home
- Will need a longer contract deadline (45 days min)
Again, it is always advisable to weigh the pros and the cons of every loan option. These programs do not cover ALL the costs of purchasing a home, they are designed to help.
You do not need to be a first time home buyer for these programs and they do not cover all the funds needed for purchasing. The minimum requirement is $1000 or 1% of the purchase price, whichever is greater. Typically your earnest money will be sufficient to cover this minimum requirement. Here is a great article, in understanding earnest money requirements.
Here is a checklist for you to reference when you are ready to get pre-approved. This checklist will help you in gathering the needing documents your lender will need to review. My best advice is to get pre-approved when you are ready to be looking at properties. There is a big difference between a pre-approval and a pre-qualification, here is info to help decide which is better for you.
Please contact us if you have any questions and/or would like to see about your qualifications.