With the many first time home buyer down payment assistance grants available, you no longer have to save up 20, 10, 5 or 3.5% for a down payment. Of course it’s great and ideal to put money down when you are ready to purchase a home but sometimes your current situation may be keeping you from saving that much money.

Some people may wonder how you can afford a home if you can’t save for a down payment. My answer is in a lot of cases YOU CAN!

Rent across the US has been steadily on the rise. Each year it gets more and more expensive to rent that home, town home, apartment or condo that you’re in. The problem is that in a lot of cases rent is MORE expensive than your mortgage payment would be. I personally know 4 people that are renting apartments and homes that are $1300+ a month.

What they don’t realize is that they are paying a mortgage, JUST NOT THEIR OWN. The owner of the home they are currently renting may have a total mortgage payment (which includes principle, interest, tax and insurance) of around $900-1000/month give or take. Guess where the extra $300 you are paying monthly goes?

This money goes to THEIR bank account! Or in some cases it goes towards paying down the mortgage quicker helping build EQUITY and increasing their NET WORTH. The building of equity and paying down the mortgage will help give them steady cash flow into retirement.

This gives them monthly residual income they can either save or reinvest. What could you do with $300+ extra dollars a month that you didn’t have to work for? that’s $3600/year of passive income.

It’s time for you to get into the game! Studies show that home owners are 58x’s wealthier than renters. Most people are paying rent for 12, 24, or 36 months with nothing to show for it after the lease it up. The landlord is happy because they are becoming richer and richer with every payment they get from you.

Let me help you get into a home with little to no money out of pocket using a down payment assistance grant.

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How To Get A First Time Home Buyer Down Payment Assistance Grant

The process of getting a first time home buyer grant is quite simple. You can either click here and answer a few questions or you can speak with me directly. We will look into a few things together. The first time home buyer grant programs have guidelines that we have to follow. They fall within the lines of monthly income, credit score, DTI, home purchase price/loan amount.

Income

When discussing income during the qualification process, the guidelines state a max income you can have to qualify for the program. If you are above these limit, you can’t qualify for the assistance. But don’t knock yourself out before speaking with a professional. Some income can be excluded when being calculated. Most of the income limits are around $88,000-$$98,000.

Credit Score

There is a minimum required credit score when looking to get qualified for a down payment assistance program. Most of the programs require either a 640 or 660+ to qualify. One of our in house down payment assistance programs allows us to qualify families with a credit score as low as 620 and in some cases a little lower. It’s best to have a credit score of at least 640 for the better program options.

Again don’t exclude yourself because you think your score is low according to credit karma, mint, myfico, creditwise by capital one or credit sesame.  The scores we go by use a different scoring model than what those sites use which can cause your score to be different than what you think. We have people come in all the time thinking their score is low according to Credit Karma only to find out that the score we use to get a mortgage is 40 points higher.

DTI (Debt to Income)

Debt to income can be confusing to understand for some. I’t is basically the the percentage of your income that goes towards paying your monthly debts and allows us to determine how big of a mortgage payment you can handle. There are two types of ratios. Your front end also known as your housing ratio which is made up of home related expenses, proposed monthly mortgage, property tax, insurance and homeowners association fees-divided by your monthly gross income.

The back in ratio includes all of the debts you pay each month- such as credit cards, student loans, car loans and personal loans + proposed household expenses divided by income.

Most down payment grant programs have a MAX back end ratio of 45%. This means you can go over this amount. If you have a high amount of debt or low income, this ratio can be eaten up rather quickly. With that in mind, we offer a down payment assistance program that allows your DTI to be as high as 50-55%.

Home Limits 

There are certain limits when it comes to the value of the home you want to purchase with one of the programs. Most of the programs max out at a home value of $300,000-$371,000.

Location of Home

Down payment assistance programs came about to increase home ownership after everything that happened in 07 and 08 with the housing marketing. The were created to help the areas hardest hit around that time. So depending on the program you choose, they are only available in certain areas. In just about every area, there is a program to choose from.

Conclusion

Those are some of the main things we look at when qualifying you for one of the down payment assistance grants. There are still a few other things we look into but that is the starting point. There aren’t any tricks or gimmicks. The process starts with a quick application and answering a few questions. From there we can determine if you qualify and wether or not you want to move forward with one of the programs.

I would love to assist you in qualifying for one of the down payment assistance programs so that we can get you owning a home. Even if you think your credit isn’t where it should be, we can help with that. We have an in house department designed to help you repair your credit. It’s possible to get this service for free! Let’s talk about your options.

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Click here to answer some questions or feel free to contact me here so we can get the process started!