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100% financing/downpayment assistance (need advice)

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soliloquy
Regular Contributor

100% financing/downpayment assistance (need advice)

I live in Charlotte, NC and want to purchase a home (1st time home buyer/no real estate within 3 years). Of course, I do not have the money for a 20% down payment.

 

I am looking into down payment assistance through http://www.nchfa.com/ but at first glance it looks like my income is too high to get $8,000 down payment assistance. I might qualify for their $4,000 down payment assistance. I don't really understand from this website if that money has to be paid back in some type of way. Maybe if you are very very bored you cold take a look at it (the county of purchase is MECKLENBURG)

 

 

When I go to the FHA website, this is what the breakdown looks like when I use the calculator at the FHA website.

 

 

So it looks like at the very least, I have to bring $7,534.00 to the table to close.

 

I am married but my husband is unemployed (worked for a now closed mortgage company) so I will be financing this on my own. My husband has given me some advice on this issue but he worked with sub-prime financing and things don't work how they used to in the mortgage industry.

 

MY TU credit score is 739 and my EQ credit score is 692 - HOWEVER, I have one credit card that I have paid down and am waiting for it to post to my credit reports. The simulator on this website says that after that credit card is paid down to $100.00 balance, my fico score will be TU: 769-809 and EQ: 752-792.

 

We have money in savings but we wanted to reserve that if at all possible.

 

Based on the information I have provided, are there any programs or services that I don't know about that I could go to for assistance. If you need more information, please let me know.

 

Has anyone ever used services like these?

 

Message Edited by soliloquy on 02-13-2010 04:56 PM
Message Edited by soliloquy on 02-13-2010 04:59 PM
Message 1 of 10
9 REPLIES 9
Jazzzy
Valued Contributor

Re: 100% financing/downpayment assistance (need advice)

I wouldn't put my hope in what the simulator says. It often takes into account that the balance is paid down over time, which takes into account the fact that the accounts age...but your scores are fine for FHA.

 

I can't speak to whether you would qualify for down payment assistance if you have savings that you could tap. If you are trying to minimize down payment, FHA or USDA might be your best choice. USDA doesn't have to be in the country. You could check that out.

Message 2 of 10
soliloquy
Regular Contributor

Re: 100% financing/downpayment assistance (need advice)

Thanks for your response. My credit has gone from 628 (EQ) and 661 (TU) since Jan 28, 2010 to the numbers I posted above.

 

This was the trend -

 

TransUnion:
739 2/12/2010

701 2/8/2010
661 1/28/2010


Equifax:
692 2/10/2010
641 2/8/2010
628 1/28/2010

 

Each time before the expected event happened,I did the simulator and it was right on target. The last pull was a pay down on one credit card, now i'm paying down a different one.

 

Things have always increased and my credit score has ended up being 10 points lower than the top number predicted for both credit bureaus. So I do think it will be in that range from what I've witnessed on the 2 other occasions I've pulled my credit score expecting an increase. I know it sounds incredible but this is what has happened so far. So I'll still keep my fingers crossed.

I'll let you know the outcome and I'll definitely look into USDA financing. Thanks!
Message Edited by soliloquy on 02-14-2010 04:01 PM
Message Edited by soliloquy on 02-14-2010 04:08 PM
Message 3 of 10
dcw0405
New Contributor

Re: 100% financing/downpayment assistance (need advice)

Hi! I live in Raleigh, NC and I was in the same position as you, only with a lower credit score.  I am a first time homebuyer.  Have you looked into buying a foreclosure?  I lucked out and found a foreclosure.  FNMA actually agreed to pay $3500 of my closing costs.  On top of that, North Carolina has a Neighborhood Stablization Program (NSP) loans available.  They come in the amount of $14,900 that goes towards any downpayment and closing costs. Basically, it works as a "second mortgage".  The info is on NCHFA website as well.  It's a five year, 0% interest deferred loan.  For every year you live in the house, the loan is forgiving at 20%.  So you make no monthly payments.  IF you move before five years, you pay a percentage of the loan back, depending on how long you lived in the house..  You may want to look into that.  I just signed all my loan papers last Wednesday.  I'm buying a foreclosure for $64,900.  I have a NC First Mortgage in the amount of $50,000 at 5.75%.  $14,900 of the 2nd mortgage is going as a downpayment.  And Fannie Mae is basically paying all my closing costs.  There are only certain lenders that are qualified to do this type of loan, their information is on the NCHFA website as well. This is genuinely a GREAT program and I'm so so lucky I'm taking advantage of it.

 

Here's some websites with helpful information regarding Charlotte and the NSP Loans:

 http://www.articlesbase.com/real-estate-articles/real-estate-buyersfree-money-14900-coming-your-way-...

 

 

http://www.nchfa.com/Homebuyers/HBbuyingforeclosure.aspx

 

Preferred Loan Officers in Charlotte: 

http://www.nchfa.com/Homebuyers/HBprefloanofficers.aspx#M

 

Charlotte Foreclosures:  This is the website I used to search for my first house... They list both foreclosures and non-foreclosures, but if you want, you can select to show foreclosures only. 

http://www.ziprealty.com/buy_a_home/search/form/city.jsp?usage=dynamic&&metro=charlotte

 

Let me know if you have any questions, good luck!! 

 

One more thing, some people say that foreclosures take forever to hear back on but with my experience, I put in an offer at 1:00pm and at 6:00pm I heard back from FNMA's realtor with an acceptance.  They actually wanted a closing a week sooner than I preferred but my point is, don't worry so much about the timing.  You'll have to check but I think you just have to have the paperwork done by April 30th and close sometime in June I believe.  GOOD LUCK!!

Message Edited by dcw0405 on 02-15-2010 09:47 AM
Message Edited by dcw0405 on 02-15-2010 09:48 AM

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Current Score (09/02): EXP 724; TU: 710; EQ: 700
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Message 4 of 10
soliloquy
Regular Contributor

Re: 100% financing/downpayment assistance (need advice)

I had been reading about that but it's great to talk to someone that went through the process. My understanding is that the loan can be forgiven if you stay in the house and make timely payments for 5 years. I will check into that further. Thank you! You are awesome.

 

Did you go to one of the "preferred loan officers" on the website or did you just pick someone that was a qualified lender? And, did you have to go through an 8-hour home buyer class?

Message Edited by soliloquy on 02-15-2010 08:37 AM
Message 5 of 10
dcw0405
New Contributor

Re: 100% financing/downpayment assistance (need advice)

Well, my story is kind of odd.  I randomly looked at houses on that website I gave you and found a house in the neighborhood I grew up in.  It just so happened that it was a foreclosure.  So I went to look at the house with a realtor who's a friend of the family before even going to a lender.  I loved the house so I met with a lender two days later.  I actually did my own research and found that NSP loan program on my own.  When I showed my lender the information, he said I qualified for that program and he'd love to help me but he's not qualified.. yet.  I guess these lenders have to go through a training program and have new software installed to process these loans.  He had gone through the training but his systems weren't set up to actually process that loan.  So I did end of going through the website and emailing a bunch of lenders.  A few responded back and of the few, I did some more research and settled with one.  The whole NSP loan program is new to a lot of mortgage lenders and 95% of realtors don't even know about it yet.  At least that's what my loan officer told me. 

 

Yes, you are right.  Here's how the NSP loan works.  It's a deferred loan - meaning that your payments are due until the end of the loan term.  However, with this loan, every year you live in the house, the loan is forgiven at 20%.  So here's the breakdown:

  • Move after 1 year = You owe 80% ($11,920)
  • Move after 2 years = You owe 60% ($8940)
  • Move after 3 years = You owe 40% ($5960)
  • Move after 4 years = You owe 20% ($2980)
  • Move after 5 years = You owe nothing (0%)

 

Here's an email I received awhile back from Rob Ruznak (he's the guy in charge of the NSP programs with NCHFA.  It may answer some more of your questions..

 
 
Thank you for asking about our programs. The NSP program offers buyers of a foreclosed property in one of 23 eligible counties a $14,900 5-year forgivable loan that can be used for down payment and closing costs in many cases. It’s forgiven at a rate of 20% a year for every 12 months you live in the house and pay your mortgage. The NSP funds are used in conjunction with our safe, 30-year fixed rate FirstHome Mortgage program. Only FHA, VA, or USDA loan types qualify.
 
The $14,900 and $8,000 DAP which we also offer cannot be combined.
 
The “Home Buyers” section of our website at www.nchfa.com has more details on the NSP program.
 
Income limits vary by county and household size. Maximum home sales price of $210,000. The house has to be built after 1978 due to federal lead paint rules.
 
All buyers must be a first-time home buyer (someone who hasn’t owned a home in the last 36 months). Military veterans are exempt from the first-time home buyer rule if they have served in the last 25 years.
 
All buyers must have taken 8-hours of classroom-based home buyer counseling from a HUD-approved counselor prior to purchasing a foreclosed home using NSP funds. There are many HUD-approved counselors in NC and can be found at
www.HUD.gov.
 
Each home must have a Home Inspection from a licensed NC home inspector and also must be purchased at least 1% below the current appraised or market value as determined by a property appraisal. The home should have no structural or safety issues outstanding based on the results of the home inspection.
 
To get started, tell your favorite realtor about the program and contact one of our Participating Lenders. We have over 700+ lenders and locations available across the state – see our website at
www.nchfa.com for a current list of participating lenders.
 
Our Preferred Loan officer’s list are folks who have done at least 5 of our loans in the last six months. The lenders will check your credit, tell you what price home you may qualify for, and take your loan application. We review your loan details in less than 48 hours once the lender sends us your info!
 
I hope this information helps. Please feel free to call our lenders or us for more details.

 

 

 

So break it down like this... Whatever purchase price your house is, $14,900 will go towards it as a downpayment.  The remainder of it will be financed with the FirstHome Mortgage at 5.75%.  Ah, lots of information.  Lol, but I like to do research...  Sometimes you have to do your own research to get the best deal.  Good luck with your search!! 

 

Oh also, I forgot if your a first-time homebuyer or not, but remember that the "first time homebuyer credit" is $8000 or 10% of the purchase price, whichever is less.  So for me, my purchase price is $64,900 so my credit will only be $6,490. 


Starting Score (01/31): EQ: 609; TU: 641 EXP: 641
Current Score (09/02): EXP 724; TU: 710; EQ: 700
Goal Score:Over 750, PLEASE!! Smiley Happy

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Message 6 of 10
soliloquy
Regular Contributor

Re: 100% financing/downpayment assistance (need advice)

Thank you! I spoke with a realtor and will be meeting with her soon. I am excited about the process and she said great things about it. The only bummy thing is you cannot buy down the interest rate but after the 14,900 is applied, at least we can still use the downpayment we have on the principle so...........it will all work out.
Message 7 of 10
hawkeye33
Regular Contributor

Re: 100% financing/downpayment assistance (need advice)

As Lynette suggested, definitely still check out USDA. You didn't mention specifically what your income level is, but for Charlotte area, you can get a USDA Guaranteed program loan for a 1-4 person household if you're under $76,500 household income.

 

You can check eligibility of a particular address at their site. It does look like there are eligible properties in Mecklenberg county.

 

http://eligibility.sc.egov.usda.gov/eligibility/eligibilityAction.do?pageAction=countyMap&st=37&stat...

 

USDA has no down payment requirement and no PMI. You do have a funding fee, which can be rolled into the loan. I went USDA in Iowa on a $194K home, and I wrote an $800 earnest money check when the offer was accepted and only had to bring about $450 to close, so that might be a good option if you (and the house) qualify in order to keep your reserves until your husband finds work again.

 

Good luck!

Message 8 of 10
dcw0405
New Contributor

Re: 100% financing/downpayment assistance (need advice)


@hawkeye33 wrote:

As Lynette suggested, definitely still check out USDA. You didn't mention specifically what your income level is, but for Charlotte area, you can get a USDA Guaranteed program loan for a 1-4 person household if you're under $76,500 household income.

 

You can check eligibility of a particular address at their site. It does look like there are eligible properties in Mecklenberg county.

 

http://eligibility.sc.egov.usda.gov/eligibility/eligibilityAction.do?pageAction=countyMap&st=37&stat...

 

USDA has no down payment requirement and no PMI. You do have a funding fee, which can be rolled into the loan. I went USDA in Iowa on a $194K home, and I wrote an $800 earnest money check when the offer was accepted and only had to bring about $450 to close, so that might be a good option if you (and the house) qualify in order to keep your reserves until your husband finds work again.

 

Good luck!


 

 

 

Yes, Hawkeye is right as well!  A USDA loan will work, too.  When I spoke to my lender about that, they are quite stringent on your debt:income ratio. If I remember correctly, it must be under 41%, and that will include your mortgage payments as well..  It was tight for me to pull that off in the rural area here in Raleigh... I got roped into the Cash for Clunkers deal and bought a pretty expensive car.  Worst decision of my life!  haha.. But I'm 25 so it's still early to make many more mistakes. Smiley Happy  Plus I had to be way outside of Raleigh to be in the "rural" area..

 

Good luck with everything, PM me if you have any questions along the way!  I close on my house March 11th.  Still waiting to take the homebuyer class on Feb 20th.  It keeps getting rescheduled here because of the "snow" we have.  haha.  And then I have to get the inspection done and then the closing on March 11th!   So I'll be happy to help with any crazy questions!


Starting Score (01/31): EQ: 609; TU: 641 EXP: 641
Current Score (09/02): EXP 724; TU: 710; EQ: 700
Goal Score:Over 750, PLEASE!! Smiley Happy

Take the FICO Fitness Challenge
Message 9 of 10
soliloquy
Regular Contributor

Re: 100% financing/downpayment assistance (need advice)

I haven't been here in awhile but I just wanted to let you guys know that we closed on our house May 17, 2010. 

 

I didn't want to forget to come back and say thanks to all of you for the advice you gave me and for the support. It was a long process but we are in our dream house and I love being a homeowner!

 

Thanks again!

Message 10 of 10
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