Down Payment Assistance(DPA)
Do you know that there are many ways where the down payment can come from? The down payment can come from federal, state and county programs, or from relatives or even close friends, while sometimes can come from assets you don’t even know you have. Some of the programs are available for First Time Home Buyers(FTHB) only, while others apply to anyone. An FTHB is anyone who has not owned a house during the past three years.
Following is a summary of some of these programs:
- Federal/State Programs – these are programs available for FTHB’s in the way of subsidies. Depending on your combined salary and your debt to income ratios you could qualify for anywhere between $15K to $150K in subsidies. This money does not have to be paid back so long as you live in the house. If you sold the house, rented it, or defaulted, it would become due. It would totally be forgiven if you lived in the house for 30 years. One word of caution though. This program is available while funds last and is subject to a very rigorous qualifying process by the government as there are many other restrictions. Contact us for more details.
- Gift from relative or even a close friend – the down payment(3.5%) could come by way of a gift from a relative or even a close friend. Should it be a close friend, proof would have to be submitted of the friendship by way of yearbooks, wedding photos, and others. Whether a relative or friend, a letter would have to be drafted stating that the money is a gift AND NOT a loan.
- $0 down, 100% Financing – if the property falls in a specific rural area you may qualify for 100% financing through the federal government bypassing the need to put any down payment altogether. There are some income requirements. Visit our Rural Area(USDA) Loans page for more information. Or if you are a veteran you may qualify for 100% financing.
- Funds from a 401K - some companies allow for withdrawals under certain circumstances from the employee's 401K even while he/she is still employed. Check with your company to verify this. If you are no longer employed with them, you are eligible to retire those funds for whatever reason subject to IRS penalties and tax regulations. However, even if you are still employed with your company in most cases you are allowed to take a loan against your 401K. Just keep in mind that in this case we have to take into consideration your new monthly payment on this loan along with your other obligations for qualification purposes. Please consult a tax advisor before you make any decisions regarding your 401K.
- Estate cash advance – if you happen to have an inheritance from an estate that’s tied up in the probate process, we may be able to get you a cash advance to use as your down payment, and to be paid back when the estate settles. One of the main advantages is that this does not show up as a liability or loan at all in your credit report. Therefore, your debt to income ratio is not affected. For more information go to www.jesfunding.com.
- Lawsuit Cash Advance – if you have a good lawsuit even if it has not settled yet, we may be able to get you a non-recourse cash advance to be paid back when your case settles. If you don’t win, you don’t pay. And like the estate cash advance, it does not show as a liability or loan in your credit report either. For more information go to www.jesfunding.com.
- US Pension Lump Sum – if you happen to have a pension from your previous job, and if you happen to have a steady job now with enough income to qualify for the mortgage by itself, we may be able to get you a lump sum from the pension to use as down payment. For more information go to www.jesfunding.com.
- Structured Settlement – if you have future payments due to you from an already settled lawsuit, we may be able to buy those future payments to provide you a lump sum today towards your down payment. For more information go to www.jesfunding.com.
- Mortgage/Business Note lump sum – if you have sold a business or property and are receiving payments due to a note you are holding, we could get you a lump sum by purchasing your future payments in full or partially. For more information go to www.jesfunding.com.
As a general rule cash in hand or “under the mattress” IS NOT considered acceptable for down payments if its source cannot be verified. Under certain circumstances if you can prove that you have been saving it for years, it may be accepted but it’s a subjective call.
As you can see, there are many ways that you may be able to purchase a property these days as we have developed one of the most comprehensive down payment assistance programs for our customers in Florida. Since we can get up to 96.5% financing through an FHA loan all you need is 3.5% towards your down payment. Even if you don’t fall into any of these categories, give us a call. We are always developing new and creative(legally) ways of helping the home buyer purchase their dream home.