Down Payment Grants
Nonprofit organizations like Partners in Charity and the Genesis Program provide from 1 to 10 percent down payments, up to $22,500. While the qualifications vary according to program, each program requires that buyers qualify for financing with their lender. Other requirements may include completing a Home Ownership Counseling course, or that the home buyer provides 1 percent of their own money. Sellers are sometimes asked to contribute as well.
Sellers benefit as well from these programs. By broadening the pool of potential home buyers, grant programs help sellers and lenders sell homes faster than they might otherwise with a smaller group of eligible buyers. In effect, down payment grant programs bring more buyers to the marketplace.
As you might expect, many programs have income/asset restrictions, recapture clauses, reserves required or geographic boundaries.
Down payment assistance programs generally participate with FHA, conforming and jumbo loan products, and can be used for single family homes, manufactured/modular home, condos, townhomes, existing or new construction, rehab and jumbo.
Most of the programs don’t underwrite the loan or add any cost in the form of points or fees. They just provide the gift for the down payment and/or closing costs.
Partners in Charity (PIC):
l Provides 2 to 10 percent down payment.
l No cash investment required of the buyer.
l No extra qualifying after mortgage lender approval.
The Genesis Program
l Home buyers are not required to provide any of their own money.
l Sellers are required to put up a contribution equal to the gift amount provided by Genesis to the home buyer (1 percent of the contract sales price or $750 whichever is less).
l Buyers are automatically qualified for a gift from Genesis if they purchase a Participating Home (a home in which the seller has entered into a participating home agreement with Genesis Housing Development Corp. The Participating Home Agreement outlines the contribution the seller makes to Genesis and its use.) and obtaining financing through an eligible loan program.
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