Recently I have been writing about sellers and how to avoid foreclosures by using a short sale strategy which has been a growing trend in the Sacramento real estate market. Another re-emerging trend is buyers using down payment assistance programs to help them qualify for a mortgage.
With lenders withdrawing from financing the full purchase price and buyers not able to get 100 percent financing like they could a few years ago, down payment assistance programs have come back to the center stage. These programs like Nehemiah, HART and others have been around for many years but not used too much in the past 5 years.
Down payment assistance programs make it possible for buyers to purchase a home with little or no down-payment, cover some or all of the closing costs and still qualify for loan that is not 100 percent financing. We recently put in contract a purchase for one of our clients who is using the HART program. The way these plans work is that the seller, in this case a bank owned property, agreed to make a contribution to the HART program equal to 3 percent of the purchase price which goes towards the buyer’s down payment requirement and an equal amount to cover the buyers recurring and non-recurring closing costs. This amount will be contributed to the HART program by the seller plus a small administrative fee. In this case, my client will receive a gift of 6 percent of the purchase price which will allow them to make a down payment and cover their closing costs. This means they are buying a great home with little or no out-of-pocket expense.
Since the home my clients were interested in was getting lots of activity and we knew there would be at least one other offer, we structured our purchase agreement so the offer price less their HART contribution was close to what the original asking price was and it was accepted.
Most lenders are familiar with these programs and sellers are starting to learn more about them and even offering their home, with 100 percent financing available. If you are in the thinking about buying a home but were worried about having to come up with a down payment and closing costs check out these programs for give us a call at Magnum One Realty. We can direct you to a qualified and experienced mortgage professional you can answer your questions and get you out looking for a new or first time home of your own.
If you or someone you know is considering buying, please feel free to contact me MagnumOne Realty office in Roseville at (916) 276-6883 and email at [email protected].
We specialize serving the needs of buyers and sellers of homes in the Roseville and Sacramento area including Sacramento, Placer, El Dorado, Sutter and Yuba counties.