November 14, 2019 at 4:10 pm #62193
Hello again! It’s been a few months since we went to ATD in New York, and I know a lot has been going back and forth with grants and buydowns and whatnot. Can anyone help me understand the current buydown option? Our original plan was to buy down to the absolute minimum since we are below 80% with this year’s numbers. At ATD we were told there was a specific grant for our area (21701) which meant we’d get a free 1% discount, but couldn’t buy it down further under any circumstances. What is currently in place? And is lender match still a thing like it was when we began? All of this information doesn’t seem to be in one place that I can find, and I’ve gotten a bit confused looking at current threads.
Thanks!November 14, 2019 at 4:37 pm #62194
Is Frederick considered Baltimore or DC metro? That won’t change the grant situation though. A few points:
The grants you are referring to are directly from BOA so they will be on BOA’s website, not NACA.
The BOA grants ran out of funds due to an overwhelming increase in NACA/BOA clients and were temporarily suspended around August/September.
Shortly after the grants were suspended BOA started negotiations with NACA to re-institute the grants and temporarily instituted a 0.5% discount until a firm deal is reached. I have not heard whether a deal is in place but, I got the impression from Tim that they were close in October and are likely going to unveil a new plan for 2020.
There is another grant where BOA will match your buy down funds effectively doubling your buy down. This was suspended as well and I have not heard anything about re-instituting. I would imagine it will come back next year.
If you are eligible for both grants you can take 1 but not both so you would have to weigh what makes the most sense to you and your situation. I am not sure about taking the rate reduction and not being allowed to buy down any more. That doesn’t sound right.November 15, 2019 at 9:20 am #62209firmeh89Member
What is the max buydown for a priority member above 80% income, I was told if your income is below 80% of the MSA you can buy down as low as 0.125% but I’m not sure what it is if you are above 80% but still a priority member, anyone who went through the process in the same position have an answer on that?November 15, 2019 at 10:14 am #62211
All members can buy down to 0.125%. The caveats are how much comes from you and how much comes from your seller or grants.
Priority members can buy down to 0.125% or use a combination of buyer and seller contributions and grants including the interest rate decrease and lender match.
Priority members above 80% cannot get the automatic rate reduction but, can still buy down to 0.125%.
Non-priority members are limited to 7 points (1 point = 0.25%) on their own. There is a fee associated so the effective buy down becomes 5.5 points. But you can still use seller contributions, etc. to buy down the rate further.November 15, 2019 at 10:51 am #62213BelleMember
We are priority members and we’re able to buy down to 0.5%. You are able to get up to 10% of the purchase price from seller, and then you are allowed to put 4-6% towards buydown depending on purchase price. Between the seller and our contributions, we were maxed at 11.5 points.November 15, 2019 at 11:04 am #62214BelleMember
I’m meant to say we are non-priority members!November 15, 2019 at 4:13 pm #62221firmeh89Member
I was told by my MC that the most I can buy down on my own as a priority member is 5 points (1.25%). I have no idea anymoreNovember 15, 2019 at 4:14 pm #62222
Thanks very much! We’re in DC MSA. We’ll actually be closing in March, so hopefully the grants are available again in some form by then. A few points though:
1) At ATD we were explicitly told we had to take the 1% off free but could not buy down further.
2) We were told if you are above 80% you cannot buy down at all.
There seems to be some conflict here? Those words came directly from an Underwriter.November 15, 2019 at 4:22 pm #62223
Yeah that’s wrong. Buy down is for everyone. It’s a naca feature. A mortgage counselor would be the best source of information not an underwriter.
I bought down 9 points and my seller added 3.
There are many people across all levels of income who in the last 6 months have written on this forum about buying down.
November 15, 2019 at 5:30 pm #62227
- This reply was modified 11 months, 1 week ago by Nelsont.
Excellent! That was my going in assumption, but both our MC and the MC next to us and another MC that came over all said we couldn’t buy down if not under 80%. I remember this all very clearly because my mother was devastated and nearly in hysterics, and then we came in at 79.9%. I am very glad to hear that feature is, in fact, open to everyone.November 15, 2019 at 6:22 pm #62228
If you think about it the people who have the means to buy down a significant portion of the loan would better off getting a conventional loan at 80 to 90% LTV then sticking with naca and receiving a 100% LTV loan if they were not allowed to buy down. That’s not what naca is about.
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