Over $3M in Down Payment Money Used Up in One Day

Down Payment Assistance Phoenix, AZ Home in FiveAt 11:04AM today we received an e-mail stating that about $3.5 Million was now available for the non-target areas of the Home in Five Program. Money previously assigned to targeted areas were now released as non-target, meaning you didn’t have to be a first time home buyer to use these funds anywhere in Maricopa county. This is obviously very good news since we are working with a few buyers who could use these funds.

A little after 5pm we received a call stating that one of these buyers had an accepted contract. Aimee quickly jumped on the Home in Five website (lenders only) to reserve funds. She was stunned! There was only $229,000 left at about 5:25PM. This is a depletion rate of about $585,000 per hour! Wow.

Moral of the story is that these funds go fast. With 100% loans scarce everyone is looking for down payment assistance. There are still programs like the Home in Five out there which are available to needy borrowers, it’s just that there are lots of restrictions attached to them and oftentimes its only available on a first come first served basis.

Fortunately our borrowers loan size was smaller than fit under the available funds, so we were able to reserve the money for their purchase.

Read more on the Home in Five Down Payment Assistance Program.

Round One Goes to Down Payment Assistance Programs

Down payment assistance programs have been under fire since last fall. It all began when the IRS came out challenging the tax-exempt status of down payment programs like Nehemiah, AmeriDream etc. The HUD issued orders to shut down the use of these program last fall. Such an action would have essentially ended the FHA loan program (which allowed the use of the down payment assistance programs to meet the minimum 3% down requirement). Talk about bad timing. But many of the down payment assistance programs sued the HUD and yesterday they won round one:

Sacramento-based Nehemiah Corp. of America won a key federal court ruling Monday that again blocked plans by the U.S. Department of Housing and Urban Development to ban its controversial down payment assistance program.

The housing agency announced in September it would ban the program within months, arguing that it triggered foreclosures and unfairly raised the price of housing for those who could least afford it.

From what my sources tell me, this ruling not only keeps Nehemiah alive but also keeps all other programs (like AmeriDream) alive as well. I just saw that Heather Barr, (North Phoenix Agent) had posted on this issue yesterday.

Down Payment Assistance Program for Maricopa County

Last Fall our CTX Mortgage branch signed up with the Home in Five down payment assistance program. I attended the training program earlier this week and in addition to learning how this program works became a participating lender. To become a participating lender you must attend the training in order to help borrowers with this loan. From what I know, I am now part of a select group of loan officers in the Phoenix area who are able to offer this down payment assistance program to deserving borrowers.

Down Payment Assistance ProgramThe Home in Five program provides 5% down payment assistance to any homebuyer who meets the income and acquisition price limits. The household income requirements range depending on the area within Maricopa county. The program targets borrowers with moderate to lower incomes. The other factor that plays a significant role in the program is the area where the property is located.

The program defines three distinct areas within Maricopa county where the program can be used: non-targeted areas, targeted areas and priority areas. These areas are defined by the census tract number (not zip code) and is only for primary residence purchases in Maricopa county. If you’re curious about a particular property feel free to contact me and I’d be happy to check it for you. The income limit and property purchase price limit is then defined per the area your property falls under. So for example if your property happens to be in a targeted area then the income and acquisition price is a bit higher compared to a non-targeted area. A priority area has an even higher limit (since it’s a priority area).

This program is open to all kinds of buyers and you don’t have to be a first time homebuyer. Remember the standard definition of a first time homebuyer is anyone who has not had an ownership interest in a residential property within the past three years. So, if you’ve owned property before three years ago you will be classified as a first time homebuyer. If you are not a first time buyer then to use the Home in Five program you must purchase a property in a targeted or priority area.

Home in Five allows for both newly-constructed or existing homes and can only be used to purchase a home (no refinances allowed). While the most attractive feature is the 5% down payment assistance, the interest rate is also below market. The program works in conjunction with a VA, FHA or Fannie/Freddie loan and as such standard loan guidelines apply. Just so you know the money for this program comes through the Single Family Mortgage Revenue Bond Program administered by the IDA’s of City of Phoenix and Maricopa County.

This is a very brief overview of the program. Feel free to contact me and I can e-mail you a brochure or answer any questions you may have.

This site is for informational purposes only. It is not sponsored or in any way affiliated with the government. If you are in need of a mortgage loan, consult with a licensed mortgage professional. All fair housing and equal housing opportunity laws apply when applying for a mortgage or buying a home. Copyright 2012.