- This topic has 3 replies, 2 voices, and was last updated 1 year, 9 months ago by ltooks.
August 30, 2020 at 4:48 am #71641ltooksParticipant
I have saved enough to contribute my buydown of 5 point (in addition to my mrf). However, I have located a grant in my city that is 30K and can be used to buydown interest. Can I use this grant to buydown further or is this considered a buyer contribution causing a need for seller contribution to lower interest rate further.
Thank you in advance for your response.August 30, 2020 at 7:16 am #71642NelsontMember
Yes I believe all funds are considered buyer contributions unless they are specifically highlighted in your contract as coming from the seller.
For your grant to work make sure it:
Does not have a closing cost requirement
Does not have a repayment stipulation
Can be used with bank of America
And before you get your heart and mind set on 30k most of the grants I am aware of that are over 10k have a “up to” amount meaning you get a percentage and the amount is split say up to 15k for down payment and up to 15k for closing costs. If that is the case you need to figure out how much you will actually get and whether it’s required you use a portion toward closing costs.
Otherwise please let us know what grant it is because people would appreciate this info.August 30, 2020 at 7:21 pm #71649ltooksParticipant
The grant is through the City of Houston.
There is a repayment stipulation and Naca is listed as one of the hud approved agencies (you are required to go through a 8 hour home buyer program). I figured since they are listed we could use it.
Here are some takeaways:
• Assistance will be provided in the form of a zero-interest forgivable loan, secured by
placement of a lien in the highest allowable position on the applicant property. Homeowners are required to maintain principal residency in the assisted property throughout the length of the compliance period. Cash-out refinancing, home equity
10 Harvey Homebuyer Assistance Program Guidelines (DR-17)
loans, are not allowed during the compliance period. A violation of this policy will
activate the loan repayment terms.
• Program participants must agree to compliance period and lien requirements. The
compliance period of homes purchased will be based on the amount of assistance provided: five (5) years for $30,000 of assistance. The lien on the property will be removed upon completion of the terms and conditions of all documents related to the program and completion of the compliance period.
• Forgiveness of the loan provided will be prorated over the course of the determined compliance period. The proration percentage will depend on the length of the period, with 100% of the loan being forgiven and the lien satisfied at the termination of the compliance period. Should the homeowner use the property as, sell, or otherwise convey their ownership interest in the property during the compliance period, the remaining prorated amount of assistance will become immediately due and payable. Should a homeowner convey ownership interest of the assisted property, HCDD will enforce recapture provisions through a lien.
• Program participants must maintain insurance for the assisted property. Hazard, flood, and windstorm (if applicable) insurance will be monitored during the length ofAugust 30, 2020 at 8:03 pm #71650NelsontMember
The very first line disqualifies the grant unfortunately.
The grant cannot be a forgivable loan. It must be a no strings attached gift.
Naca also takes out a 5 year $25000 lien on all purchases which would prohibit the grantor or any other party from taking a lien out which this grant does.
The reason for nacas lien is much the same as this grant which is to help deter flippers and profit seekers and to help build stability in the community.
Essentially the only types of grants that work are those that say oh you’re a first time homebuyer? Here’s 5000 for you to do with whatever you want.
Also naca is listed as an approved agency because naca is a HUD certified agency and satisfies the hud requirement of homeowner education. In other words if you want to use the grant you need to attend 2 to 3 classes and the naca workshop counts as one of them. But beyond that…:(
- You must be logged in to reply to this topic.