A Gift Fund or Gift of Equity Can Be Your Best Gift Ever

Did you know? Nearly 25% of first-time home buyers use cash gifts as down payment on their home, according to the 2017 National Association of Realtors Profile of Home Buyers and Sellers report.

Yes, it’s true.

Many people find it difficult to purchase their first home when cost meets financial constraints (like having to pay off student loans despite good-paying jobs).

Here’s where caring friends and family may step in and help out—by offering a gift fund or a gift of equity.

What Is a Gift Fund and What Is a Gift of Equity?

When you’re looking to buy a house and you’re getting a loan, any money that your relative wants to contribute toward the purchase of your home is called a gift fund. Gift funds are common when a person buying a home doesn’t have all the liquid money to purchase it and a relative is willing and able to help supplement their financing needs.
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The Lowdown on Delaware Down Payment Grants

John Thomas August 10, 2018 Tags: Delaware Down Payment Assistance, Delaware Down Payment Assistance Grant, delaware home buyer seminar, Down Payment Assistance

Delaware Down Payment Grants Bridge the Gap

For Delaware buyers that are having trouble stretching their savings for the required down payment for their desired mortgage, Delaware Down Payment Grants Down can be a life saver. The grants were designed to assist buyers who find themselves short of the down payment and usually don’t have to be repaid. This makes them an ideal helper to anyone looking to secure financing for their home buying journey.

It is definitely worth it to go through the sometimes tedious process to get approved for the grants – much of the money goes unclaimed. There are a few things you need to know about Delaware Down Payment Grants:

The money awarded for Down payment assistance is allocated to Delaware via HUD.
The main eligibility requirements include credit score and income, the price of the home, and the area the home is located.
Applicants must be first-time buyers purchasing a primary residence.
It is essential to understand the fine print – there are strict rules that could result in the money needing to be returned.

The John Thomas Team can help you determine if you’re eligible for a Delaware Down Payment Grant – contact us by calling 302-703-0727 or simply APPLY NOW.

Delaware Down Payment Assistance Programs Can Ease The Process for First Time Homebuyers

It’s no secret that first time home buyers face a number of issues, the biggest being down payment costs. Delaware Down Payment Assistance Programs can help create a more manageable experience on the home buyer journey. Programs like Delaware Down Payment Grants are designed to help eligible buyers create a bridge between their savings and the down payment costs for a mortgage.

It is important to understand the difference between a grant and a loan. Grants do not have to be paid back if the borrower meets the guidelines for the program. Loans have to be paid back at some point. Some loans may have a deferment period with no payments and some have no payments only have to be paid back when the home is sold or refinanced.

If you’re in the market for a home and struggling to find funds, it’s important to understand the information below to help you navigate Delaware down payment grants successfully.

Where Should You Look For Delaware Down Payment Grants?

Before you get started, it’s important to understand how these down payment grants work. The grants are not provided directly to individuals by the government. HUD allocates money to states instead, and from there states award the funds to qualified buyers. The process works like this in Delaware – all grants are awarded at the local level.

The Delaware Down Payment Assistance (DPA) program have different guidelines. The main program in Delaware has been the DSHA Advantage 4 Grant program which provides a grant of up to 4% of the mortgage loan amount. Programs can change and/or be discontinued to it is important to check with a mortgage lender to make sure which programs are currently available.

Are You Eligible for Delaware Down Payment Grants?

Although every grant and assistance program vary, here are some general qualifications that you may be expected to meet:

You must be a first-time buyer purchasing a primary residence for most programs.
Income limits apply for most programs
There is usually a maximum home sales price, which depends on local housing costs.
You will likely have to attend a homebuyer HUD approved counseling program. These courses help educate future homeowners about managing their financial responsibilities. For list of Delaware home buyer seminars click here: http://www.DelawareHomeBuyerSeminars.com
Most times, the home must be located within certain geographic boundaries.

Delaware First-time Home Buyer Definition

What constitutes as a first-time home buyer in Delaware? There are a couple of exceptions in Delaware that you might not have thought about. A Delaware F

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DSHA Preferred Plus Down Payment Assistance Program

John Thomas May 3, 2018 Tags: Delaware Down Payment Assistance, DSHA Preferred Plus Program

DSHA Preferred Plus Down Payment Asssistance Program

DSHA Preferred Plus Down Payment Assistance Program

DSHA Preferred Plus Down Payment Assistance Program is a new Delaware down payment assistance program to replace the current DSHA SMAL Loan Program and the DSHA Advantage 4 Grant Program effective May 1, 2018. The Preferred Plus program provides Delaware home buyers with down payment assistance loans for 2% to 5% of the first mortgage loan. The down payment assistance can be used toward the required down payment and/or closing costs. Call 302-703-0727 for more information or to apply for the Preferred Plus Program. You can also apply online at DSHA Preferred Plus Program Application

What are the guidelines for the DSHA Preferred Plus Down Payment Assistance Program?

The new DSHA Delaware Down Payment Assistance program will be a soft second mortgage with the following terms:

Minimum 620 FICO score to be eligible for the program
Must be under the total household income limit for the county
Must be purchasing a home for $417,000 or less
Can receive from 2% up to %5 of the first mortgage loan for down payment assistance
Must receive an approve/eligible response from the automated underwriting system
Will sign a Note and Mortgage for Soft Second mortgage at closing
Must attend 8 hours of HUD approved home buyer counseling if credit score is less than 660
Must use one of DSHA’s first mortgage programs through an approved DSHA Mortgage Lender such as Primary Residential Mortgage
Must provide three years of Federal Tax Returns for each working household member to DSHA to prove have not owned a home and are under the income limits for the program.
*First lien interest rates maybe higher when using a DPA second.

What are the eligible property types for the DSHA Preferred Plus Program? Keep Reading...

Wilmington Delaware Down Payment Assistance Program

John Thomas December 22, 2017 Tags: Delaware Down Payment Program

Wilmington Delaware Employee Homebuyer Assistance Program

What is the Wilmington Delaware Down Payment Assistance Program?

The Wilmington Employee Homebuyer Assistance Program is a grant program offered by the City of Wilmington where an employee can earn up to $4,000 in down payment and settlement assistance toward the purchase of a home. Homes must be within the City of Wilmington boundaries and meet specific requirements set by the City of Wilmington for their Liver Near Your Work Program. The John Thomas Team can help get you prepared for homeownership with our first time homebuyer programs in Wilmington – call (302) 703-0727 or Apply Online.

Wilmington has designated a portion of its own funding to help its employees buy a home within city limits. This is one of a number of great first time home buyer programs in Wilmington and could potentially put you in a home. Employees that meet the Wilmington City requirements (outlined below) can receive a grant of up to $4,000 (the amount cannot exceed down payment and settlement costs). The down payment assistance money does not have to be paid back by the employee if they live in the property for 5 years as it is a Delaware down payment grant.

How do I Qualify for the City of Wilmington Delaware Employee Down Payment Assistance Program?

The program has a few restrictions, including:

You must purchase a home within the City of Wilmington to be Eligible for City of Wilmington Live Near Your Work Grant Program
You must be a City of Wilmington employee who has finished their probation period
You must complete Homeowner Counseling with approved Delaware HUD Counseling Agency.
You may only receive funding once in a five year period
You must provide a minimum of $1,000 cash contribution toward the total transaction
You must get a fixed-rate mortgage with no option for cash out
You must live in the home as your primary residence for a minimum of 5 years.
Employee will receive a 1099 form from the City for the grant amount and it will be taxable as income.
Must meet the household income restrictions and be within maximum sales price limit

Once you’re approved, your awarded funding will be reserved for six months after the date of signing. It’s important to take advantage of this within the time frame – funds are based on availability.

What are the household income and sales price restrictions for the City of Wilmington Employee Down Payment Grant?

In order to qualify for the City of Wilmington Live Near Your work (LNYW) program you must meet the household income guidelines and the property must be within the maximum sales price limit outlined below:

Household Income Limits for 2022:

Sales Price Limits for 2018:

What are the Qualifications my Potential Home Must Meet for City of Wilmington Live Near Your Work? Keep Reading...

PRMI Dream Maker Down Payment Program

John Thomas September 25, 2017 Tags: Delaware Down Payment Program, Delaware First Time Home Buyer

PRMI Dream Maker Down Payment Program

Are ready to buy a home but don’t have the 3.5% down payment required by FHA? Or can’t get a gift for the down payment? We have a loan program for you that will lend you 100% financing with a FHA Loan and our PRMI Dream Maker Down Payment Program. Call us today at 302-703-0727 to started on the process or go online at Dream Maker Online Application

What are the Qualifications for the PRMI Dream Maker Down Payment Program?

The requirements to qualify for the Down Payment Assistance are as follows:

620 Minimum FICO score for all borrowers

No Income Limits to qualify!

Must be purchasing the property as Primary residence

Eligible to get as much as $13,700 for down payment

No Home Buyer Education Required

Second Mortgage Amount up to 3.5% of purchase price

Forgivable Soft Second Mortgage if under 115% of Average Median Income (AMI)

Non-Occupant Co-Borrowers are Allowed

Must Receive Approve/Eligible Response from Automated Underwriting System (AUS)

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DSHA Advantage 4 Grant Down Payment Program

John Thomas May 10, 2017 Tags: Advantage 4 Grant

DSHA Advantage 4 Grant Down Payment Program

(DSHA Advantage 4 Grant NO LONGER AVAILABLE!!!)

The DSHA Advantage 4 Grant down payment assistance program is a grant of up to 4% of the first mortgage loan amount to be used for down payment and/or closing costs for Delaware home buyers that qualify for a DSHA first mortgage loan. The program was discontinued by DSHA in May of 2018 and replaced with the DSHA Preferred Plus Down Payment Program. The grant Does Not have to be paid back after closing on the home purchase and is only offered by a Delaware State Housing Authority approved mortgage lender. You can apply for the Advantage 4 Grant Program by calling 302-703-0727 or APPLY ONLINE

What are the qualifications for a DSHA Advantage 4 Grant?

In order to qualify for the Advantage 4 Grant you must meet the following requirements:

Must be under the maximum household income limit of $97,900
All applicants must have a 640 middle FICO credit score
Must be purchasing the home as your primary residence
The Maximum Total Debt to Income Ratio (DTI) is 45%
Must use DSHA first mortgage loan to purchase the home
Non-occupant co-borrowers are NOT allowed

The first mortgage loan with DSHA can be a FHA Loan, a VA Loan, a USDA Rural Housing Loan or a Conventional Mortgage Loan. You can also use the Mortgage Credit Certificate (MCC) Program along with the Advantage 4 Grant but must be under the lower income limits for the MCC Program.

What are the maximum household income limits for Advantage 4 Grant Program?

The maximum household income limit for the advantage 4 grant is $97,900. Anybody that will be living in the property that has income will be added into the household income regardless whether or not they will be on the mortgage loan. For example if a married couple is purchasing a home and only the wife is going on the mortgage loan because the husband’s credit score is too low to qualify we must still verify the husband’s income for total household income.

For Example:

Wife Annual income – $55,000

Husband Annual income – 45,000

Even though the wife is the only one on the loan and her income is under the limit we must add the husband’s income so their total household income would be $100,000 which would be over the $97,900 limit and they would not qualify for the Advantage 4 Grant.

What are the terms of the DSHA Grant Down Payment Program?

The DSHA Advantage 4 Grant is essentially free money given to the borrowers at closing by the Delaware State Housing Authority and does not have to be paid back. The grant is up to 4% of the first mortgage loan amount so for example on a FHA purchase borrower 96.5% of the purchase price:

Purchase Price – $200,000

Base Loan amount – $193,000

Upfront MI Premium – $3,377 (financed into the loan)

Total Loan Amount – $196,377

Advantage 4 Grant – $7,755.08 (4% of the total loan amount)

*First lien interest rates maybe higher when using a DPA second or grant.

Where Can I Use the Advantage 4 Grant?

The Adv. 4 Grant Program from Delaware State Housing Authority can be used in all three counties of the state of Delaware which include New Castle County, Delaware; Kent County, Delaware; and Sussex County, Delaware. The only restriction is the maximum first mortgage loan amount cannot exceed the county limit for FHA Loan or $417,000 for VA Loan, USDA Rural Housing Loan, and a Conventional Loan. The interest rate for the first mortgage loan is set by DSHA and is the same no matter which DSHA approved mortgage lender that you choose to use.

How do I Apply for the Advantage 4 Grant Program? Keep Reading...

DSHA SMAL Down Payment Assistance Loan

John Thomas March 3, 2017 Tags: Delaware down payment programs, DSHA SMAL

DSHA SMAL Down Payment Assistance Loan Program

(DSHA SMAL Program NO LONGER AVAILABLE!!!)

DSHA SMAL Down Payment Assistance Loan Program is a Delaware Down Payment Program for qualified Delaware home buyers who meet the income restrictions and credit requirements. The program was discontinued by DSHA in May of 2018 and replaced with the DSHA Preferred Plus Down Payment Program. The Delaware State Housing Authority Small Mortgage Assistance Loan (SMAL) program is a second mortgage loan of up to $8,000 at 3% interest for the term of the loan. You can apply for a SMAL loan by calling 302-703-0727 or online at SMAL Loan Application

What are the qualifications for a DSHA SMAL Loan?

In order to apply for a DSHA SMAL down payment assistance loan you must meet the following requirements:

Must be purchasing the home as your primary residence

Must be under the maximum household income limit for the SMAL

All borrowers MUST have at least a minimum 640 FICO credit score

Must use DSHA first mortgage loan program to purchase the home

Non-Occupying co-borrowers are not allowed on the first mortgage loan

The maximum debt to income limit for the program is 45%

Must NOT exceed the maximum purchase price limit for the county

Must Complete 8 Hours of HUD Approved Home Buyer Counseling

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New Castle County IDEA Down Payment Program

John Thomas December 9, 2016 Tags: IDEA down payment program, NCC IDEA, New Castle County IDEA

New Castle County IDEA Down Payment Program

A Delaware down payment assistance program that provides loans up to $5,000 at 0% interest is the New Castle County IDEA Down Payment Program. IDEA stands for Innovative Development Empowerment Area and is a down payment and settlement assistance program to help home buyers purchasing homes in eligible census tracs in New Castle County Delaware. Call 302-703-0727 to apply for the program or APPLY ONLINE

What is the New Castle County IDEA Program?

The IDEA provides home buyers with second mortgage loans at 0% for the purchase of homes in approved census trac areas for down payment and/or settlement assistance. It is a 10 year loan at 0% interest with no required payments for the first year of the program then the loan will be paid back during the remaining 9 years on a monthly basis.