First Time Home Buyer | Best Grants and Down Payment Assistance Programs Now 2024

if you've been frustrated because you're a potential first-time home buyer and you're trying to find a great down payment assistance program Andor grant that will work for you but you haven't been able to find one it's a frustrating uh situation so this video we're going to try to put together some good information for you I'm going to give you a broad overview of down payment assistance programs and grants and why sometimes they're good for you why sometimes they you can't fit into them because they have so many restrictions and at the end we're going to give you at least two options National options these aren't local options that could fit for you one's going to be a grant and one's going to be a very low down payment assistance but stick all the way through you're going to learn a lot and like I always say let's kick off this Rodeo right now hi folks I'm Kevin Fagan I'm the Overview mortgage Patriot on your side nestled in the Hill Country right above San Antonio Texas serving Texans and great Patriots all over this country in this video we're going to talk about first-time home buyer programs and grants because it's 2024 and the start of the New Year always kicks off with the administrators of these programs revamping or creating new programs for you so in the course of this video I'm going to do a couple things we're going to start off with a quick overview of kind of what the whole landscape looks like in terms of where do these grants come from and so forth secondly we're going to talk about the restrictions that are typical of virtually every down payment assistance program because there's plenty of them and then I'm going to tell you even if you are lucky enough to get the down payment assistance program what are two of the adverse effects of getting those down payment assistance programs in other words what do they sneak in there that makes it maybe not quite so attractive as you might have thought and then lastly we're gonna I'm going to show you two different current programs in 2024 that I feel like are the best ones that go around the prior restrictions and and the prior adverse conditions I'm talking about in other words they don't fall into those prior categories of of bad things happening and then we'll close it out with an example so once again let's kick off that information right now as I begin the presentation of all this information please like And subscribe below if you would that really helps me and it helps you because it allows my YouTube videos to get shown better and I've got a great library now built up over the past year and a good audience so I thank you for that uh looking at my videos so this helps me quite a bit if you like And subscribe also text or call or contact me by email I always respond it's always kind of funny when somebody calls me and I actually answer the phone and they're a little surprised but I will answer the phone where I'll tell you when I can call you right back let's get into that information once again right now so with Down Payment Assistance Programs respect to down payment assistance programs and grants there's lots of confusion because they come from all different sources there are National programs there are State programs there are County programs there are City programs and finally there's lender specific programs so you literally have thousands and thousands of possibilities No loan officer like myself could know even but a handful of them the best thing to do is to tell me what area you're in tell me where you reside what your current address is and I can find out ultimately what is best for you think about that as we walk through all the rest of this material if you tell exactly where you live what your goals are then I can find out what the best program is going to be for you so let's get into those restrictions right now Down Payment Assistance Restrictions let's talk about these restrictions I mentioned earlier well I'm going to list them off and then we'll come back to each one of them you have income thresholds you have debt to income restrictions you have credit score minimums you have location duration and you have lastly what I'll call Grant exhaustion so let's go take the very first one income thresholds there's income limits on all these down payment assists programs for the most part if you make too much money you can't get the down payment assistance that's that simple most of the down payment assistance programs are based on Ami area median income you're allowed 80% typically of area median income for most programs if you exceed that sorry no can do the program right secondly you have the debt to income restrictions what does that mean if you make for example $6,000 a month you're only allowed some percentage of $6,000 usually 45 to 50% if you exceed that level of Deb to income you again cannot qualify for a down payment assistance program so they all vary but typically they're start about 45 to about 50% debt income limitations uh you also have like I said credit score minimums usually I can find some that are 600 to 620 but most of the time you're going to find a you're going to need at least a 640 score so 640 score are better if you're below that I can help you raise your score there's a couple easy tricks okay and we talked Location Duration about what I said location duration what does that mean it means a lot of these County programs and City programs for example you have to be living in that county or city for at least six months so if you're moving out of town into a new spot you can't get that down payment assistance program for at least six months because you haven't lived in that location so that's kind of crummy and then lastly you have what I call Grant exhaustion meaning on the grant programs yes great the grants are available usually at the beginning of the year and they roll out but that money is only a set amount of money usually by the middle of the year to the end of the year the grants are gone all these have little restrictions hurdles roadblocks for you and let's talk about two of the adverse conditions if you do get a down payment assistance program or Grant so Fair Market Rates two adverse areas that you definitely want to understand if you're looking at a down payment assistance program and or Grant is that number one they sometimes do not give you fair market rates let's let's assume that the prevailing rate today for an FHA is six and a half or conventional loan is 7% That's about where we are now six and a half for FHA 7% for conventional assuming you know 700 score for example a down payment assistance program if it's an FHA might give you seven and a quarter so three4 above six and a half in other words they're raising the rate on you same thing with conventional if it's a seven they might give you a seven and a half to seven to three quarters what are you really gaining there you got to be careful of that and you're not allowed to buy down the rate in other words on a fair market rate if it's at six and and a half you want to get seller concessions to buy the rate down you can do that you can get six maybe you can get 5.75 you're not allowed that option with the down payment assistance program for many of them so that's number one number Second Lean two is they put a second lean on your property so you have a first lean for the actual financing of the home you have a second lean which usually incorporates the down payment so for example if they're covering all your down payment let's say it's a $300,000 House 3 and a half% down payment FHA that's $105,000 okay $105,000 is your is what they're covering on their down payment assists they add $10,500 as a second lean to your home now sometimes you pay on that second lean sometimes you do not pay on the second lean it's called a silent second but either way that lean remains and most often if you try to sell your house within the first three years or five years or 10 years whatever stipulations are you have to repay that second lean that's not cool so for example there's a Hometown Heroes great program in Florida at least people think it's great it's called the Hometown Heroes great program maybe 5% of your purchase price can be covered with the down payment assistance well great let's say you're buying a $300,000 home 5% of that is 15,000 they're going to take 15,000 and they're going to put that as a second lean you're not paying on the second lean it's 0% interest but guess what it never goes away you either if you refinance you have to pay off that second lean if you sell your property you have to pay off that second lean so are they really giving you help or not I don't know maybe in some cases it makes sense for you but I think there's better options SPCP Grant so I'm going to go into two of those great options right now so the first of these great programs or grants I'm going to refer to as the spcp grant what does it do it's going to allow for first-time home buyers to get up to $6,000 of closing cost coverage and it's going to combine that with a 3% not a three and a half or a 5% a 3% conventional loan so all the borrower and buyer needs is a 620 credit score and you have to live in a certain current address so look at this QR code I've shown on the screen here I'll also have one in the description but hover over that now and fill it in all the way please tell me exactly what your full address is and of course give your name your number and your email I'll will let you know if you're eligible for this grant as an example if you're buying about a $250,000 home and you're eligible for this Grant and you even get let's say $5,000 of seller concession combined with this you could probably be writing a cash to close check on a $250,000 home for about $5,000 so in other words combining the Grant and seller concessions buying a $250,000 home uh you're going to be writing a check for only about $5,000 that's a heck of a deal option number two is if you can't fit into this grant I would try this one first I would look at this 1% down I have a 1% down conventional loan product now this one is income restricted so how does a borrower come eligible for this 80% of Ami area median income if you have below 80% of the area median income where you live currently or the property is located you'll be eligible for this 1% down conventional loan neither of these How to Qualify programs the SPC loan or the 1% down conventional loan create higher interest rates they give you prevailing rates and they allow you to buy down the rate if you need to or want to also neither of these programs attach a second Lean Like I talked about earlier there's no adverse second lean be it silent or otherwise that you have to pay off or pay down or pay monthly on both those programs are fantastic remember it's where you live on the spcp grant send me a comment fill out the form call me text me but let me know basically what your circumstances are and where you currently live and I'll just tell you what the best deal is going to be for you in this country so I hope all this was great and informative for you Kevin Fagan mortgage Patriot on your side let's make it a great one END OF TRANSCRIPT