Down Payment Assistance - How do I get it?

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Helping Buyers with Down Payments

I just listed a home in a troubled area for pricing…imagine that! All the condos around this one is heading to foreclosure and subject to third party approval, in other words, a short sale. The pre-foreclosure market is skyrocketing higher everyday. There are 163 homes listed in RealtyTrac as Pre-Foreclosure today, while there were only 48 two months ago.

So I had to come up with a strategy to help this seller maximize her sales price and make it more marketable than the lower priced counter parts. This seller knows her stuff and had already remodeled the whole unit. She completely remodeled the Bathrooms…no one else’s cooties. Updated the kitchen with ceramic tile. New carpeting throughout the rest of the condo. And of course no remodel is not complete without a fresh coat of neutral paint. This type of upgrade is almost a given in this market if you want to be competitive. And by the way, the other condos are list “as is”…which means you, the buyer does AAALLLL the repairs. Not such a good deal after all.

But we still needed one more up on our competition…more so than Closing Cost assistance. Banks look at todays market as a “Declining” or “Soft” market, which makes it harder for the average joe to secure a loan. Most banks are requiring at leasta a 5% down payment in order to swing the loan.

In comes the Down Payment assistance programs. Since most lenders have a cap on how much assistance a seller can give the buyer, buyers either have to have the extra money in their banks accounts (chances are very slim for first time home buyers.) or they need a gift from someone. This gift is usually from a relative like Mom and Dad or everyone’s favorite rich uncle. There are a few non-profit organizations that realize the not everyone has that rich uncle, but the sellers are willing to help in order to sell the house.

Two programs that I heard success are successful and easy to use are the AmeriDream and the Nehimiah Down Payment Assistance Programs. Key things about these programs the seller has to agree to it, because they make the donation to these organizations. In turn, they give the donation back to the buyer as a gift minus a nominal fee…(a new rich uncle)

At AmeriDream, our goal is helping first-time, and low and moderate income individuals and families become homeowners. AmeriDream’s Downpayment Gift Program gives buyers up to 10% of the sales price of a home for a down payment or closing costs, removing the largest barrier for many prospective homeowners.

For this home I recommended the Nehimiah Program, ordered up some signs from them along with some program flyer’s and advertised “Down Payment Assistance Available”

  • Gift funds up to 6% of the final contract sales towards your downpayment and/or closing costs
  • Gift funds for both first time and repeat homebuyers
    • (Nehemiah charges a nominal processing fee that may be paid by the seller, homebuyer, or lender.)
  • Gift funds for both new construction and resale homes
  • No repayment of gift money
  • No income or asset limits
  • No geographical restrictions

The listing is brand spanking new (literally and figuratively) so I will let you know how it goes. This is one solution I offer to help sellers attract buyers. Each home is unique…so the marketing needs to be just as unique.

Contact me today, if you are ready to put your house on the market.

Here’s a peek at this diamond in the rough.

Have a great day.

If you liked that post, then try these...

Buying a house in Frederick Part two on June 30th, 2007

Ignore the Headlines - finally the media gets it on February 20th, 2008

Market Conditions Frederick MD on August 20th, 2007

Open Houses in Frederick MD 8/25 - 8/26 on August 25th, 2007

Buying A House in Frederick MD What do you need to know? on June 19th, 2007

April 2, 2008 · Filed Under Buyer, Frederick MD Real Estate, Friday

Comments

9 Responses to “Down Payment Assistance - How do I get it?”

  1. Karen Rice on April 2nd, 2008 9:10 am

    Good stuff here! These programs are a godsend to home buyers - it’s very difficult to earn a living, pay your bills, and manage to squirrel away several thousands of dollars for closing costs.

    Karen Rice’s last blog post..The Eagle Has Landed - Wild Card Wednesday

  2. Ann Cummings on April 2nd, 2008 11:41 am

    Hi Bob - this post has some great info in it for buyers, and I love how you broke down both of those down payment assistance programs. I had heard of the Nehimiah program but did not know what it was. I may just have to alert buyers in my area to these types of programs as well.

  3. CEG on April 2nd, 2008 1:35 pm

    Brilliant!

    CEG’s last blog post..Look How Thin & Sexy This Foreclosure Makes Me Look

  4. wepaycash on April 2nd, 2008 8:16 pm

    Foreclosure houses present an opportunity of a lifetime. Foreclosure home are due to loans that have been defaulted by the current homeowner. Since the homeowner is unable to make their payments, the lender has evicted them and taken control of the property.

  5. Carole Cohen on April 2nd, 2008 11:31 pm

    Bob, we are recommending FHA to almost everyone now. And you did a super job explaining the programs. Needless to say we are in a declining market as well.

    BTW, the blog looks very sophisticated now. I love the dark blue

    Carole Cohen’s last blog post..A Cleveland Baseball Story….

  6. gotbob on April 3rd, 2008 10:22 am

    Karen, You are absolutely right buyers need programs like this.

    Ann, I am glad I helped you. Good luck with it…key thing is a willing seller.

    CEG, :)

    Wepaycash, thanks for the Ad

    Carole, Thank you.

  7. gregkameron on April 3rd, 2008 3:16 pm

    Nice Topic, Down payment assistance should be there for the home buyers which are more useful. There should be the programs about down payment and the home seller should maximize sales price and make it more marketable.

  8. Jack Boardman on April 5th, 2008 5:18 am

    You know I (and many others, I must add) live to give you crap–and here you post great information denying me the opportunity! [[sigh]] ;-)
    Jack Boardman’s last blog post..Danger Bay—Episode 74—Port-of-Call Daytona Beach—Bikes and Blues

  9. They “Duped” em. Down Payment Assistant Programs feeling slighted : Focus On Frederick.com on August 21st, 2008 10:41 am

    [...] came across this video on a Loundon County Real Estate agents site.  I told you before about the Nehemiah and AmeriDream.   It has been in front of Congress for sometime now on the HR 6694 - FHA Seller-Financed [...]

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