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Are there any private programs providing downpayment/closing cost assistance without an income cap?

Alternatively, are there any zero downpayment programs left exclusive of the VA loan?

I'd like to give further details regarding my question: In this particular case, the borrower will be purchasing the home as a primary residence using an FHA loan but there is also a non-occupying co-borrower, who needed to be included for the pre-approval due to the borrower's debt to income ratio. Due to the co-borrower's income level, all federal grant/loan programs offering downpayment assistance are out, correct? (Even if the borrower's income would qualify for such programs?)

Second question: Are there any "private" downpayment/closing cost assistance programs in existence?
  • July 27 - San Jose
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Answers (5)

There are actually down payment assistance programs available in every community. They include: down payment and closing cost assistance, grants, below-market rates, Mortgage Credit Certificates, rehab loans, among others. Both the home and the borrower must qualify - eligibility requirements vary from program to program. In addition, these programs can be layered. For example, a VA or FHA loan with a down payment grant. Contact your state or local Housing Finance Agency to find out the options in your area. You can also search our Down Payment Resource Center at downpaymentresource dot com. These can be much better options for the buyer than family "gifts" or cashing out a 401K, plus they typically require valuable homeownership education.
  • July 28
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Closing cost are easy, those can be handled via seller credit (FHA allows up to 6% of sale price) or lender credit (slightly higher interest rate to allow for a "rebate" from the lender to assist with closing cost). These two options can only be used for closing cost (including prepaid items). As far as down payment, that would need to come in the form of a gift (at this point I would look to the non-occupant co-borrower). You are looking for 3.5% of the sales price, quite honestly I would rather give down payment rather than co-sign a loan. Also be sure to check out secured sources of down payment (cash value life insurance, 401K loan, etc)
  • July 28
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Profile picture for wetdawgs
The USDA loan program has an income cap.
  • July 28
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Hi Marauderette,

Is the DR 50% or less without the non-occupying co-borrower? If so, the NHF Sapphire Grant program may be an option.

The only other option would be to purchase a home in a rural area and use the USDA loan program.

Best regards,
Elva
  • July 28
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Profile picture for wetdawgs
If you are including a co-borrowers income for qualification, it has to be included in all parts of qualification.

The only private down payment assistance programs I know of are variations of the bank of Mom and Dad.

Frankly, it doesn't sound like the buyer is financially ready to buy today, but is at the stage where it is worthwhile to put together a savings program for down payment/closing costs and an income improvement program.

 
  • July 27
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