Home Plus Mortgage Loan Program Benefits

Benefits of the Home Plus Mortgage Loan Program

Buying a home is very exciting and probably the largest transaction you’ll ever make. With the serious housing recession experienced a few years ago, very few people were able to accomplish this.

While the economy has picked up dramatically the past couple years, it’s still very difficult for many individuals or families to buy homes.

Fortunately, there are programs like the Home Plus Mortgage Loan Program to help potential homebuyers fulfill their dreams of being homeowners. Here is a little information on the program as well as the benefits it offers.

What is this Program?

This is a mortgage program administered by the Arizona Industrial Development Authority to help individuals or families buy homes in Arizona without the worry of coming up with a big down payment and closing costs.

Arizona residents can use this program to buy homes in any county but Pima County. Residents of Pima and Tucson County can get down payment assistance from the Pima Tucson Homebuyer’s Solution Program.

What are its Benefits of  Home Plus Mortgage Loan Program?

  • Lower income individuals can become homeowners.
  • Get assistance with down payment and closing costs
  • Assistance is on the second mortgage and gradually forgiven
  • Assistance not added to the first mortgage
  • Applicants get a 30-year mortgage
  • Lenient requirements (credit scores and DTI)
  • Veterans get an additional 1% assistance

How Does It Work?

The Home Plus Mortgage Loan Program offers potential homebuyers assistance with down payments and closing costs on a 30-year fixed rate first mortgage. The amount of assistance a homebuyer can get from the program is based on a percentage of the principal balance of the mortgage loan. This may be from 0% to 5% depending on the loan type.

The recipient receives the assistance in the form of a three-year, no payment, no interest, deferred soft second mortgage loan. Each month, this assistance is forgiven at a rate of 1/36 over the term of the loan.

Applicants can choose from different types of loans, such as VA, FHA, USDA, Freddie Mac, Fannie Mae or some other conventional loan. The percentage of assistance the home buyer chooses will determine the amount of assistance the homebuyer receives. For instance, if an individual wants to buy a home for $200,000 and they choose the 5% option, they would get $10,000 in assistance.

The first step the applicant should take is meeting with a lender to determine eligibility for the Home Plus program. Once it’s been determined that he or she is eligible, they can begin house hunting. When they find their dream home, their realtor will be responsible for negotiating, coming up with the final price and taking care of finalizing the sales contract. With sales contract in hand, the borrower can see the lender and begin the loan process.

Eligibility Requirements

To be eligible for the Home Plus Mortgage Loan Program, the applicant and the loan must meet the following requirements.

  • The home must be the primary residence.
  • Purchase price cannot be higher than $371,936
  • Borrower income must not be higher than $92,984
  • Borrower’s debt-to-income must not be higher than 45%
  • Potential buyers must complete a pre-purchase homebuyer course
  • Co-signer not required to live in the home.

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USDA Loans – How They Help Low Income Home Buyers

How USDA Loans Help Low Income Home BuyersIndividuals or families who want to purchase homes in rural areas often find USDA loans to be the best option.

For eligible applicants, they can offer an opportunity for a person or family to purchase their dream home without having to meet some of the stringent requirements often found in conventional mortgage loans.

What is a USDA Loan?

Offered through the United States Department of Agriculture, USDA loans are mortgage loans for rural and suburban homebuyers. Unlike many other mortgage loans, they require no down payment. Their purpose is to improve the quality of life and economy in rural America.

They also offer low-interest rates to eligible applicants and are also relatively easy to get for those who meet the requirements. More than 126,000 families were able to purchase and upgrade their homes in 2017 through the Rural Development program.

What Are Requirements for a USDA Loan?

Despite it being said that these loans are very accessible, applicants still must meet the eligibility requirements, which are listed below.

  • Must be U.S. citizen or U.S. no-citizen national or qualified alien.
  • The property must meet program criteria.
  • Must meet income levels.
  • Purchase must be for main occupancy.
  • Must be legally able to obtain financing.
  • Must provide proof of willingness to make payments on time.
  • Must not have been banned or suspended from participating in federal programs.

Are There Requirements as to How the Money Can Be Used?

There are requirements on how the loan proceeds can be used, but they are quite generous.

  • For new or existing residential property to be used as your home
  • For a site with an existing or new dwelling
  • To refinance a current eligible loan
  • For repairs or remodeling an existing dwelling
  • To install features for a household member with a physical disability
  • To pay fees for connection and cost of utilities
  • For a pro-rata share of property taxes to be paid at closing
  • For necessary household equipment like laundry appliances, heating and cooling equipment, wall-to-wall carpeting, ovens, ranges and refrigerators
  • To purchase energy efficient products (solar panels or insulation)
  • For installing broadband service to the dwelling
  • To pay for preparation costs, including landscaping, driveways, foundations, trees and fences

How Do USDA Loans Help Low-Income Home Buyers?

They can help low-income home buyers in many ways. When consumers can’t purchase a home or obtain a mortgage loan, it’s usually because they can’t afford a down payment. Or it can be that they can’t afford high monthly payments that may result from high interest rates. USDA loans are known for offering homebuyers lower interest rates than they’d find with conventional loans, which mean lower monthly payments.

Another bonus, and probably the biggest one, is the zero-down payment feature. A large down payment requirement is probably the biggest reason aspiring homebuyers cannot buy homes today. If a homebuyer must put down 20 percent on $150,000, that comes to $30,000. By not requiring a down payment, the USDA loan is very much helping low-income individuals become homebuyers.

If the USDA loans sounds like it might be the right loan for you, and you think you may meet the requirements for the loan, don’t wait another second. Contact us at First Choice Lending Services. Speak with our qualified loan specialists and see what we can offer you.

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