New Website Helps Hopeful Homebuyers Find Down Payment Housing Grants

Gulf Breeze, FL (PRWEB) October 15, 2003

Now home buying consumers have an independent website to turn to for information on the different types of down payment assistance programs. http://www.usadownpaymentassistance.com helps potential homebuyers find their way through the maze of down payment assistance options and is offering homebuyers the option to apply directly online for a down payment assistance grant for FREE.

With the refinance craze starting to slow down, mortgage companies have to focus on home purchase loans as the main source of their business. But, with the traditional business comes a traditional problem: Most potential homebuyers can qualify for a mortgage; they just can’t afford the down payment and closing costs associated with the mortgage.

“With literally hundreds of options available, the vast majority of would-be homeowners are not aware of the types of programs that exist to help them,” claims Steve Owens, founder of the American Referral Association, “There are government programs at the city, county, and federal level, there are loan products available through some of the major lenders, and there are hundreds of non-profit organizations out there just waiting to give down payment money away.”

Now consumers have a place where they can go for information. http://www.usadownpaymentassistance.com is a website to help homebuyers learn about the various programs, what some of the positives with each program are and the negatives. According to Owens, “All of the programs are good, but they also all have some conditions attached that the homebuyer needs to be aware of. “For instance, some of the government programs will give buyers the down payment money; however, if you move from that house in 5 – 15 years, you will be required to pay it back. And, because of the tedious paper work involved, some mortgage professionals have expressed a reluctance to use them.”

Several of the major lenders offer a similar product. They are also referred to as silent seconds -- a second mortgage that is a forgivable loan if you remain in the house for a specified amount of time, usually around 15 years.

Charitable organizations are another option. This is one of the fastest growing segments in the country. These organizations will give the homebuyer a grant based on the type of loan they are approved for, typically FHA, and the homebuyer will never have to repay it. The non-profits get their money from a pool of existing funds that the home sellers replenish when the home sells.

For example, if a homebuyer purchases a home for $150,000 and needs a three percent grant, the charity awards it to them. After the closing has taken place, the seller gives a matching contribution of three percent back to the charity so the charity can help the next homebuyer waiting to receive a grant. The downside is that all of the charities charge a marketing fee, ranging from ½% to ¾% of the sales price. Some sellers will be reluctant to pay any additional fees.

Market conditions will also determine whether a seller will agree to the charitable program, Owens advises home buyers, “If you are going to use the charitable down payment assistance (DPA) funds, keep in mind that you need the seller to participate. Therefore, try to offer asking price instead of negotiating a lower price. By the seller agreeing to participate, they are essentially already agreeing to a sales concession.”

For more information, consumers can log onto http://www.usadownpaymentassistance.com and learn about the programs. There is even a link to the HUD web site to get information about the various federal programs. Homebuyers can also complete an application on the website. It will be forwarded to a DPA organization or a mortgage professional that is familiar with using DPA grants.

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