Buy down and grants

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  • #69050
    segun292
    Participant

    Good day,

    im based in New York and hoping to purchase in New Jersey. When do i have to indicate to my MC that i want to buy down my interest rate? Can i inform my MC once im under contract? or do i have to inform them before that when PSL is being requested?

    Secondly, i want to understand the BOA grants and how i can use it to get assistance with buying down my interest rate..

    #69051
    Nelsont
    Member

    Buy down information needs to be in your psl request. It’s best your MC is aware you plan to buy down before you are qualified but it’s not a big deal just as long as you 1. Have a detailed description of the buy down where it’s coming from and whether the seller is also contributing when you request your psl and 2. Have the money in your checking account when you go to credit access and have a detailed paper trail of it’s origins if you didn’t have it prior to qualification.

    So for any program if you receive a grant it works exactly the same (usually) as when your seller contributes in that you never actually see the money it just goes directly to the bank (or subtracted from the amount owed to the seller in the case of seller contributions) and gets applied toward your down payment and or closing costs. Since there are no closing costs and no down payment with naca all grant funds and seller contributions are automatically applied toward interest rate buy down.

    With that said whether you use naca or not is it a lot easier to get your seller to contribute 3 to 5% than it is to get most grants. Furthermore most grants even some of boas don’t work with naca. If you do find one please share because this topic comes up a lot.

    • This reply was modified 5 months, 3 weeks ago by Nelsont.
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