DOWN PAYMENT ASSISTANCE PROGRAMS

So did you hear that there are programs that help you with your payment on your first home? I get asked this question a lot. Here is some more info to help. Just be aware these programs come with eligibility requirements to access the money. It is not just a simple "application process".

Here is how they work.

Yes, they do provide money for the down payment. This money is in the form of a loan or grant depending on the entity that provides it. Every organization has their own requirements.
Yes, they provide a starter down payment amount. This down payment often ranges 3%-5% of the purchase price.
Yes, there is often a "cost" for this amount. This "cost" sometimes has a payment related to it, sometimes is a grant, and sometimes is a "silent-second" also known as a silent second mortgage. The silent second mortgage usually has no payment and often does not have any interest. It usually attached to the title of the property that is being bought, and is repaid when the first mortgage is refinanced or when the property is sold depending on the program. This means that some programs forgive those 2nd programs as well.

Many programs are based on household income and credit. One of the first steps is to see if you qualify. Contact me for help!

Some programs provide funds only, where a buyer then gets the loan from a lender, and some programs provide both the funds AND the lender.

How to qualify?

To qualify for these programs, you'll generally need to meet income, debt, and credit score qualifications, any other program specific qualifications, and complete a homebuyer education course. 99% of the time these programs are based on FHA loan guidelines, which allow borrowers to have lower or worse credit, but the homes must be in nicer shape - no homes that need a bunch of repairs.

What is important to remember?

To obtain a new mortgage there are multiple components to consider:

The payment amount per month.
Down-payment (what the programs on this page help with)
Closing transaction costs commonly called "closing costs". These are often either financed in the loan, or the seller can pay them, up to a certain amount.
In the qualification process for the mortgage it is important to remember that most of these program are used with an FHA loan and borrowers must qualify for that mortgage to access these programs.
The home must appraise for the loan value being requested.

Where to find programs?

Sometimes these are sponsored on the local level at the county or city, or they may be a lender specific program. Here are ones I know about:

PUBLIC AGENCIES:

Most public agency programs have an income qualification of not more than 80% of the regions gross annual income. To see what the median family income in an area, please visit Income Limits Documentation System
The City of Vancouver does NOT have a down payment assistance program.
Clark County Housing and Community Services (HCS) - Down Payment Assistance Program:
- Clark County HCS offers assistance to low- and moderate-income buyers. The program provides a second mortgage to help cover down payment and closing costs. Eligibility requirements include income limits and a first-time homebuyer status, or having not owned a home in the past three years. This program is currently out of funds.
Washington State Housing Finance Commission (WSHFC) - Home Advantage Program:
- This program provides a competitive interest rate mortgage and down payment assistance up to 4% of the loan amount. It's available to first-time homebuyers or those who haven’t owned a home in the past three years. The Home Advantage Program can be used in conjunction with other WSHFC programs. There are income, debt, and credit eligibility requirements.
Washington State Housing Finance Commission (WSHFC) - House Key Opportunity Program:
- Offers a second mortgage to cover down payment and closing costs. This program can be combined with WSHFC’s first mortgage programs. There are income, debt, and credit eligibility requirements.

LOANS:

Federal Housing Administration (FHA) Loans - For First-Time Home Buyers:
- While not specific to Clark County, FHA loans offer lower down payment requirements (as low as 3.5%) and can be used in combination with local down payment assistance programs. There are income, debt, and credit eligibility requirements.
USDA Loans (for rural areas):
- For eligible rural areas, the USDA provides zero down payment loans. Some parts of Clark County may qualify. There is a property address, income, debt, and credit eligibility requirements.

PRIVATE LENDERS:

United Wholesale Mortgage Down Payment Assistance