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What is Down Payment Assistance?
Down payment assistance is funding provided to homebuyers, typically first-time buyers, to help with the down payment and/or closing costs associated with purchasing a home.
Sources of Down Payment Assistance:
* Government Agencies: State, county, and city governments often offer DPA programs.
* Nonprofits: Organizations dedicated to affordable housing may also provide assistance.
* Lenders: Some mortgage lenders offer their own DPA programs.
Types of Down Payment Assistance:
* Grants: These are funds that generally don’t need to be repaid.
* Loans: These can be low-interest or even zero-interest loans, sometimes with deferred payments until the home is sold, refinanced, or paid off.
SPRINGFIELD
The Down Payment and Closing Cost Assistance Program provides down payment and closing cost assistance of up to $4000 for income-qualified first-time homebuyers purchasing a home in Springfield. The homebuyer must use the home as the primary place of residence. The home may be 1-4 units.
DPA Program Process
We help those who are the process of getting their first home, and answer all the questions they have. Our goal is to help maximize the chance of getting the best loan possible. We answer all questions needed, such as whether or not you will qualify, how long it will take to close, and the process of qualification and approval for a mortgage.
Step 1 – Get Pre-Approved By A Lender
Get pre-approved by Northeastern Realty, find a house, and make an offer! This is all to be done before submitting a DPA application to a Down Payment Assistance (DPA) program.
Step 2 – Complete and submit the DPA Application
Once you have received a pre-approval letter from your lender.
Step 3 – Conditional Approval
As soon as your eligibility has been confirmed by the DPA program, submit your approval documents to the lender.
Step 4 – HOME Inspection
The HOME Investment Partnerships Program (HUD) requires a HOME inspection of the home to certify that the property meets HUD’s quality housing standards.
At a minimum, the home must meet all applicable Federal, State, and local housing quality standards and code requirements, and the home must not contain any specific deficiencies as those proscribed by HUD in the Uniform Physical Condition Standards inspection procedures as pursuant to 24 CFR 5.705.
You will be provided with a copy of the inspection report. If the property does not meet HOME condition standards, repairs will need to be completed before the City can issue the loan. After the repairs are made, we will re-inspect the property to certify that the repairs were made.
Properties built prior to 1978 must be visually assessed to identify and stabilize deteriorated paint.
Step 5 – Initial Underwriting Conditions
Preliminary commitment letter sent to buyer offering conditional approval contingent on satisfactory FTHP inspection. *NOTE: Borrower must have 1.5% of their own funds going toward transaction. If earnest money does not cover this, include amount they must bring to the closing as a contingency in order to satisfy this requirement.
Step 6 – Final Underwriting Approval
Final commitment letter to Buyer with copy to NHS authorizing NHS to disburse funds on behalf of the BRA. Closing documents to be sent to closing attorney for signature by Buyer at the closing. NHS will forward their Mortgage and Note to BRA so they can send everything together to closing attorney.
Step 7 – DPA Disbursement
NHS to disburse the authorized FTHP loan amount to the participant. NHS will advance FTHP loan amount to buyer and will invoice the BRA for reimbursement.
Step 8 – File Completion
Lender is to send Closing Disclosure and Loan Commitment Letter to the DPA program. Then this is done, the closing attorney and/or lender is to provide the DPA with all recorded HOME Mortgage and signed Note.
Step 9 – Enjoy your new home!
Ready to make your move?
While these are the most common steps people take when buying a house in Massachusetts using a down payment assistance program. Whether you’re knee-deep in the home buying process already, about to begin looking, or have further questions about how buying a home works, reach out to us for more information.