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2/21/2014

GRANTS to Buy a Home in California


Down Payment Grant Gift




Orange County INCOME LIMITS GENERAL NUMBERS

FHA Max                                             

$85,680 Riverside & San Bernardino
$102,360 Orange County
$85,680 Los Angeles County
$91,080 San Diego County

                               

Compare CHDAP, CHFDAP ACCESS Down Payment Assistance Programs – Which is Better?

Compare CHDAP, CHFDAP, ACCESS Down Payment Assistance Programs – Which is Best?

Home buyer down payment assistance loan programs such as CalHFA’s CHDAP, CHF DAP, and the CHF ACCESS program are three of the most popular first time home buyer assistance programs in California.

The CHDAP and ACCESS program all provide 3% assistance that can be applied towards meeting FHA’s 3.5% minimum down payment requirement.
CHF DAP gives grants gifts five percent

I offer all these mortgage loan programs but each is a little different

CalHFA’s CHDAP assistance, CHF’s DAP Grant, and the CHF ACCESS assistance program will help you make better home financing decision that impact you long after you move into the home.

 

CHDAP
CHFDAP
ACCESS
Assistance Amount
3% – sales price
5% – loan amount
3% – sale price
3% Assistance
Silent 2nd Loan
Grant
Loan Repaid
Qualifying Area
All California
All California
All California
Mandatory Origination fee?
0
1.5%
0
Credit to pay closing costs?
Up to 2%
Yes
Very Limited
DTI Ratio Max Limit
55%
50%
43% – 45%
Minimum Credit Score
640
620
580
First Time Buyer Only?
Yes
No
No
Income Caps? (county)
Yes
Yes
Yes
Income that Qualifies
Household
Borrower
Borrower
Max Loan Amount
$417+
$500
$417k+
90 Day Flips Allowed
Yes
Yes
Yes
Prepayment Penalty?
No
No
No
Max Seller Contribution?
3%
6%
6%
Gift Funds Allowed?
Yes
Yes
Yes
Cancellation Fee?
No
$400
No
$250,000 Purchase
Comparison
===========
========
Assistance Amount
$7,500
$12,500
$7,500
Down Payment Needed
.5% = $1,250
0
.5% = $1,250
Est. % Rate /apr (call for actual current rate)
3.875 / 4.962
4.5 / 5.413
4.5 / 5.183
Rate on 2nd lien
3.25% (deferred)
NA
8.25%
Mtg P&I Payments + MI
$1,405
$1,208
$1,567

Interest Rate: The interest rate comparison is for a 30 year fixed, 660 FICO score, from a time when CHF published their Platinum rate of 4.5%. Rates can vary, but for the most part, the Platinum and ACCESS mortgage rate is .5% to .625% higher than a regular FHA loan. Rates change a couple times a day. This is not a rate quote. This is not a commitment to lend. These programs may be cancelled at any day at will. APR is listed above as second number 

All assistance programs are subject to funding availability

CalHFA CHDAP Down Payment Assistance Program

As you can see, the CalHFA CHDAP home buyer assistance program typically offers you a much lower interest rate, payment, and is the least expensive option between the three assistance programs. Some people say the CalHFA’s CHDAP is the BEST down payment assistance program in all of California.

CHFDAP Down Payment Assistance Program

The CHF DAP program seems like it should be the better program because the 5% grant never has to be repaid, right? CHF Platinum charges an additional 1.5% up. Plus, the interest rate, on average, is .5% higher than CHDAP assistance program.

 
In the $250,000 purchase scenario above, the CHFDAP assistance program gives you $12,500. for the down payment (less than CHDAP or ACCESS), then charges you a 1.5% fee ($3,618), AND you Just because you can use the Platinum assistance program doesn’t mean you should, right? What do you think?

CHF ACCESS Down Payment Assistance Program

The CHF ACCESS program offers the highest interest rate, reduces how much you can qualify for but does cater to borrowers with lower credit scores. However, since the assistance in the form of a 2nd loan (15 yr fxd) that is actually a fully amortizing payment, you’re paying that 3% loan off and building equity faster.

 

Can I Refinance Out of My Higher Rate Platinum or ACCESS Loan in the future?

To qualify for an FHA streamline refinance, FHA has a 5% net tangible benefit requirement test.

 

In five years (after having built enough equity to 80%  assuming 3% gain in value per year -  or if you have additional funds to pay the loan down sooner) you may be able to refinance out of this this FHA assistance loan and into a conventional loan. Of course your value could go down rather than up. There is no guarantee you will have income or credit to refinance at a later date.

 
The Platinum and ACCESS down payment assistance programs are great for people who don't have a family member who can give them a gift or haven't saved enough money on their own, have lower credit scores (but not always), and may feel the only way to purchase is to accept a higher rate and fee home buyer assistance program.

If you can’t get your credit score to 640, or make more than the CHDAP program income cap, you don’t have many options. That’s when Platinum and ACCESS fill a void. I can help you raise your FICO score for free. Don't be urgent to buy with a low score. Call me to get some action paln to raise the score as it will affect your rate and long term payment.

 

THE CONVENTIONAL LOAN PROGRAM IS MUCH BETTER BUT YOU NEED HIGHER FICO

 

5% Grant combined with Conventional loan

Income limit Orange County = $ 93,750 or $7793 monthly

 

FICO score needed  660

Using 43% debt to income ratio as a target

Individuals will have a variety of parameters, FICO, debts, = many factors to

count into qualifying but these are some general numbers

 

$7793 X 43% = $3351 PITI target

 

 $480000  sales price

$456000 loan     

p and I  $ 2310

                                Mi               380

                                Tax              490

                                Insur.           80

 

                          Total   $3260    They could not have any bills with a $ 480000 loan

Seller pays some of closing costs? OR buyer needs about $4000 to close

***

 

$7000 month income X 43%  = $3010 target

$400000 sales price

$380000 loan

                      P and I    $1925

                      Tax               416

                      MI                310

                      Insur              79

                   TOTAL $ 2730   - 3010 they could have $280 in monthly other bills

Seller pays some closing costs or Buyer needs about $ 3800 to close

***

 

$6500 month income X 43% = $2795

        

$375000 sales price

$ 356250 loan

                                P and I   $ 1805

                                Tax               390

                                MI                 290

                                Insur               77

TOTAL $ 2562 - $2795  the could have $ 233 in monthly other bills
 
O.K you made it through all those numbers. I know it sounds confusing. Just call me and we can talk about your scenario. Everyone is unique.
 
Below are some fun pictures I took with my iphone at MIT with my son as your reward for reading.







 

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