The program is designed for low income people to purchase a home with a lower down payment, and especially, there is no private mortgage insurance (PMI).
What is this program? And what is special about it?
The program is suitable for low-income borrowers, allowing them to make a minimal down payment of just 1%. In addition, they will receive a down payment assistance grant of 2% of the purchase price. The grant does not require repayment and has no prepayment penalty.
- Minimum grant:
- $2,000 for borrowers with 50.01% AMI to 80% AMI (*)
- $2,500 for borrowers with 50% AMI and below
- Maximum grant is up to $7,000. Unlike some other lenders, our lender does not cap 2% grant at $4,000.
The lender applies different grant levels for each case, depending on the Area Median Income (AMI). They do not pose difficulties for low income individuals. Please keep reading to get it clear!
This program is particularly aimed at helping mid and low income buyers afford a home in today’s market.
The opportunity to buy a home for low income individuals is more open now.
Especially, no PMI requirement: Normally, buyers with low income who put down less than 20% on a home purchase must pay PMI. This is also the reason why people with low income and limited savings hesitate to buy a house. Our program eliminates this PMI.
The Important Criteria to Qualify for Low Down Payment Program.
This is a conventional loan, so the conditions are quite easy for most of the low income people. These are important things you need to know.
- Property type is allowed only a single-family home and used as the primary residence.
- Loan amount is up to $350,000
- Min FICO is 620
- Down payment: when combined with 2% grant, your initial down payment can be no more than 5%.
- Income: Applicants must have an income that does not exceed 80% of AMI (*) based on the county where the property is located.
- (*) Area median income (AMI) is the middle amount of money that households earn in a specific area, and it’s figured out every year by the Department of Housing and Urban Development.
See the AMI chart limits below:
The Area Median Income (AMI) limits by County 20232 -2024
For example:
- If your property is located in Riverside County, California, the AMI is $94,500
- 80% of AMI = $75,600 so your monthly income is $6,300
- It means that:
- If your monthly income does not exceed $6,300, you can qualify for this criteria.
- You can buy a home at $360,000.
- Minimum down payment of 3%:
- The lender provides a maximum grant of $7,000 (~2%).
- You bring in $3,800 (~1%).
- Loan amount: $349,200
Income limit is a crucial requirement in this program.
Revealing the Program: How does this program Work?
The documentation for this program is similar to the conventional program. Regardless of whether you have low income or high income, the lender requires:
- Purchase contract
- Credit report
- Income documents: tax return, pay stub
- 1% down payment.
Depending on your situation, you may need additional documentation for verification. We will review and provide you with more comprehensive advice.
Before selecting a home, please contact us for advice on homes that fit your income.
It’s unbelievable, this is where the program is applied.
Perhaps you are already aware of other down payment assistance programs limited to the state of California with deadlines for application submission. Additionally, not all applications are selected; lenders choose randomly. However, this program is available nationwide, currently with no deadline, and all qualified applications are approved. These are significant advantages of this program compared to others.
This program is currently available nationwide in the United States.
This amazing 1% down payment program helps more people with low income buy homes by cutting out the extra PMI cost and giving a 2% grant. Buying a home is now possible and affordable to low income individuals. Ready to make your dream of owning a home a reality? Contact our company today to get started.
We have many home buying tips to share with you, please check them out here.
👉 http://www.danguard.com/loan-officers-best-advices-on-how-to-buy-the-first-home/
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