At MortgageDepot, our goal is to make homeownership accessible to as many people as possible. Homeownership strengthens communities and helps the economy at large. One of the biggest hurdles many potential homebuyers face is coming up with a sizable down payment. And in recent years, the down payment requirement for many mortgage lenders has risen substantially.
As experienced mortgage brokers, we at MortgageDepot understand that there are plenty of good reasons why lending requirements have tightened. But some of those same protections can potentially burden a community. It’s difficult for home values to rise when prospective home buyers can’t get approved for a mortgage. And it’s difficult for cities to prosper when people have a difficult time putting down roots.
That’s why we love hearing about communities that are taking action to stop stricter mortgage lending from hindering the growth of their communities. Many Cities have partnered with local mortgage lenders to offer grants for homebuyers within the city limits, and for homeowners in the city who’d like to refinance their existing loans.
To qualify for this loan, the borrower only needs to provide the lesser between a 1% down payment or $1,000. The rest of the down payment, up to 7% of the total loan amount, will be covered by a grant from the partnership. This particular program allows borrowers to have an income of up to $133,000. The grant can be used to purchase an owner-occupied property, including multi-unit properties up to 4-units. All the borrower has to do is stay in the home for at least five consecutive years and make on-time mortgage payments to have the entire grant forgiven.
You might wonder what happens if you have to move or sell before the five years are up. Well, in that case, you would have to pay the grant back plus a penalty on a prorated basis. The goal, of course, is to incentivize home buyers to stay put in a community rather than moving on a whim or flipping their home for a profit.
At MortgageDepot, we’re the experts on grants and subsidies that help homebuyers and homeowners get the best possible deal on their mortgage loans. We’re also experts on FHA financing and programs such as “Fannie 97,” which offers mortgages with only a 3% down payment. Wherever you live, contact us at MortgageDepot today if you’d like to find out more information on this or any other program that will help your dreams of homeownership a reality.