How to qualify for a forgivable loan loan down payment and closing costs in Corona, CA, by Jenny Gonzalez.

By Jenny Gonzalez

123rf.com How to Qualify for a Forgivable Loan Down Payment and Closing Costs In Corona, CA

As a first-time homebuyer, it can be difficult to purchase a home, especially if you can’t afford the down payment. Making down payments is the norm when it comes to home purchases, but given the exorbitant prices of homes in Corona, CA, raising the money for down payments is not easy.

Closing costs can also pull some surprises on you. Even if you have saved enough for your down payment, you might just realize that you still owe some thousands of dollars in closing costs, which you might not afford at that particular point in time.

The good news is you might qualify for a forgivable loan down payment and closing costs through down payment and closing cost assistance programs if you meet certain criteria.

WHAT IS DOWN PAYMENT AND CLOSING COST ASSISTANCE PROGRAMS?

Coming up with cash for purchasing a home is often a hurdle that most first-time homebuyers pass through. Although some mortgage programs require no down payment, a vast majority do require that you make a down payment. The down payment is a substantial amount of cash equal to a certain percentage of the home’s final price.

This is where down payment and closing cost assistance programs come in. If you are a first-time

homebuyer, these programs will help you cover your down payment in the form of grants and forgivable loans. Down payment and closing cost assistance programs can relieve the cost burden on homebuyers so that they don’t have to spend so much on the final purchase of the home.

Every state has its assistance programs for firsttime homebuyers. Most times, the state housing commissions under the HUD offer these assistance programs to low and middle-income homebuyers. Non-profit organizations and private mortgage lenders also offer assistance.

TYPES OF ASSISTANCE PROGRAMS OFFERED

Down payment assistance programs offer money in the form of grants or loans, which include;

• Grants • Forgivable loan • Low-interest loans • Deferred-payment loans

Homebuyers don’t have to repay the money offered through grants, forgivable loans, and deferred payment loans, but the forgivable loans come with a condition for the non-repayment. You won’t have to repay forgivable loans if you stay in the home for a number of years, as specified by the program. The number of years can range from five years to twenty.

However, if you move before the period ends, refinance the home, or sell it, you will have to pay back everything or a certain portion of it. Low-interest loans allow you to cover your down payment and closing cost while you pay back every month.

Forgivable loans, deferred-payment loans, and lowinterest loans are called second mortgage loans and are usually offered to the homebuyer once the first mortgage is concluded.

HOW TO QUALIFY FOR A FORGIVABLE LOAN DOWN PAYMENT AND CLOSING COSTS ASSISTANCE PROGRAMS

The requirements to qualify for a forgivable loan down payment and closing costs differ from state to state. Some states have less strict requirements than others.

Aside from the income, the other requirement you must meet is the credit score. These assistance programs require you to have a minimum FICO score of 620 and above. Other requirements include;

• You must be a first-time homebuyer • You must reside in the home for a number of years • The home must be situated in a particular place according to the program • The borrower must complete their classes in finance and homeownership • The property choose must be a single-family home • You must choose a suitable lender ready to work with the program

HOW TO APPLY FOR A FORGIVABLE LOAN DOWN PAYMENT AND CLOSING COST ASSISTANCE

The best way to apply for assistance programs is to look for available DPA programs in your area on the HUD website. Chenoa Fund, Fannie Mae and Freddie Mac, FHA Loans, and USDA Loans are some down payment assistance program options you can look up. In california, we have two that the Power Is Now Media Inc, is affiliated with;

1. THE GOLDEN STATE FINANCE AUTHORITY

California’s Golden State Finance Authority (GSFA) created the Platinum Program, which provides low-to-moderate income California homebuyers with down payment and/or closing cost assistance to help them achieve their goals of purchasing a home.

Available Assistance

GSFA’s Platinum Program provides applicants with down payment and/or closing cost assistance in the form of a non-repayable grant up to 5 percent of the total loan amount. This is a gift in the true sense, which means it is not a second mortgage, does not create a lien against the property, and there are no terms for repayment.

The purpose of this program is to make funds available to eligible applicants who are interested in purchasing a home but need financial help to pay the upfront costs, which include the down payment,

as well as the closing costs and prepaid items required to obtain homeownership. These expenses can add up to a substantial amount, and the inability to pay it might keep people stuck in a renters trap.to find out more about this program, go to; http://www.gsfahome.org/

2. CALIFORNIA HOUSING FINANCE AGENCY

FHA: MyHome offers a deferred-payment junior loan of an amount up to the lesser of 3.5% of the purchase price or appraised value to assist with down payment and/or closing costs, with a cap of $11,000.

USDA, Conventional: MyHome offers a deferred-payment junior loan of an amount up to the lesser of 3% of the purchase price or appraised value to assist with down payment and/or closing costs, with a cap of $11,000.

VA: MyHome offers a deferred-payment junior loan of an amount up to the lesser of 3% of the purchase price or appraised value to assist with down payment and/or closing costs.

Note that the $11,000 cap does not apply to school employees and fire department employees, or those purchasing new construction homes, manufactured homes, or homes with ADUs Review the sections below to find out more about the MyHome program. To find out more about this program, go to; https://www.calhfa.ca.gov/

Alternatively, you can also check your city or county’s website for more information on available assistance programs. You need to ensure that your mortgage lender is willing to work with the program.

The amount of money awarded to you depends on the program. While some offer a percentage of the home’s price, others have an assistance limit. So, when looking for these programs, ensure they suit your needs.

CONCLUSION

Coming up with a down payment is the most difficult thing when purchasing a home. However, you need not rack your head about how to raise funds to purchase a home in Corona, CA with the plenty of options available.

With assistance programs, you can get help raising funds for the down payment and closing cost. You can qualify for a forgivable loan and avoid paying closing costs once you fulfill all the requirements.

If you are unsure if you would qualify for a forgivable loan down payment and closing cost, or don’t know where to look for the right one, don’t hesitate to reach out to Eric L. Frazier for assistance with purchasing a home or investment property or Jenny Gonzalez, one of the VIP agents in Corona, CA. Eric L. Frazier MBA is a licensed Mortgage Advisor NMLS 461807 with First Bank and can be reached at 800-261-1634 ext. 703.

ABOUT JENNY GONZALEZ

I have been happily helping clients since 1998. I started out with three boys 5 and under and wanted to raise my children from home and be a contribution to my family as well. I first started at a company that did Real Estate and Loans. I first learned the loan business as Real Estate revolves around loans and it is an important part of learning Real Estate. After 6 months of mastering that craft (I’m a numbers person) I dove straight into Real Estate. My first listing was a couple in their 30’s that responded to a handwritten letter to them like all the other letters. To read more about jevvy, go to; https://www.thepowerisnow.com/jennygonzalez-3/

ABOUT THE POWER IS NOW

The Power Is Now Media is an online multimedia company founded in 2009 by Eric L. Frazier, MBA, and is headquartered in Riverside, California. We are advocates for homeownership, wealth building, and financial literacy for low to moderate-income and minority communities. The Power Is Now Media corporate office is located at 3739 6th Street Riverside, CA 92501. Ph: 800-401-8994 Website: www.thepowerisnow.com.

References

https://themortgagereports.com/65878/closing-cost-assistance-where-to-getit-and-how-it-works https://www.credible.com/blog/mortgages/first-time-home-buyer-programs/ https://www.rocketmortgage.com/learn/down-payment-assistance