The other day, in the liar, liar, pants on fire post, I was talking about investment property, and the idea of real estate as a “get rich quick scheme”.
But if you’re buying a home to live in, then there is a way to get into a home for only about $500. out of pocket.
FHA allows the seller to pay up to 6% total of the sales price toward the buyers closing costs and down payment. The closing costs part of it is pretty standard and is done all the time. The other 3% however, is actually a donation to a non-profit organization, who in turn, makes a GRANT gift back to the buyer to use as a down payment.
There are several of these “down payment assistance programs” with Nehemiah being the most famous. Others that I aware of of include Ameridream and now a new one that came into my radar last night as a result of a report on Channel 8 about the FUTURES program.
The trick is…. the seller has to be willing, the sale price of the property including the seller’s contribution has to be able to appraise, the buyer has to fully qualify for the FHA loan, the sales price has to be within the FHA limits of 413,000, and it takes a little more time than if you don’t do it this way.
It’s really the only almost zero down way to buy a home right now, and with FHA rates at LESS THAN 5.5% (subject to daily and sometimes hourly fluxuation, of course).
There’s some really motivated sellers now who are would be happy to “donate” if it would get their home sold. With prices that are now affordable to most buyers, maybe this is the “deal” you’ve been waiting for?
Many of my listings are willing to assist with the down payment. There’s thousands of others, also, though the banks and their repos are not as anxious to give up another 6% when they’ve already taken such a well deserved beating.
Ruth Sertic, At Vision Mortgage, who I’ve worked with for 13 years is one of the most knowledgable, and focused FHA lenders I’ve ever met. She’s done lots of these downpayment assistance loans, and can tell you quickly if you’ll qualify. She can be reached at 278–7269 or I can put her in touch with you.