However as Raymondo put it the USDA loan would be better and there are a lot of areas that qualify there. This is a true zero down loan.
The company I work for WCS Lending, is one of the largest direct lenders for the USDA program. The mortgages are much less expesnive. If the property qualifies and you meet the income requirements, it is clearly a much better option.
As one of the Loan Officers stated earlier, these programs are highly sought after, but the waiting is long and getting longer. As an alternative the USDA Rural Development Loan is great option if you would consider buying in a different area. See link for available areas:
USDA Official Website:
Income Limits: http://www.rurdev.usda.gov/ca/pdf%20files%20and%20documents/
I am closing 4-5 of these a month due to simple fact that people can surely make a payment, but it hard to save up a large down payment in this economic climate and the RDL offers a true $0 Down Payment home loan with monthly mortgage insurance which can save thousands over the life of the loan. Another possible program that we offer is the CHF Platinum Program:
Although these programs have income limits, so do most of the DPAPs. The CHF Program offers a 3% Grant that can be used towards your down payment or your closing costs. If used for your down and you got the seller to pay for your closing costs, you would only need 1/2 of 1% to contribute for your down payment. That's awesome!
The city funded DPAP's are fantastic programs. You're getting 20% or more and all payments are deferred. How much better can it get? Although most municipalities require a minimum 3% borrower contribution.
Because they are so generous, these programs are in high demand and the funds dry up quick. Add to it, the state-wide budget crisis and I don't see many cities allocating funds away from other programs, to help homebuyers. Call the City of San Marcos, they'll tell you what their forecast on funds availability is. If it's anything like Costa Mesa, they'll say "Not in the near future".
If you're hot to buy and have 3% for a DP, you can get an FHA loan with 3.5%.
If you don't have 3%, then you couldn't get the cities DPAP program anyways, so your only option is an FHA DPAP program like ours or buying in an area defined as Rural by USDA and getting a USDA 100% financing loan.
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Primelending - San Diego
We offer a DPAP program that can be used in San Marcos or anywhere in California. It's an FHA Down Payment Assistance Program that assists with up to 3% of the purchase price toward an FHA 30 year fixed loan. Minimum borrower contribution is 1/2% of purchase price, plus appraisal and home inspection fees. Seller can credit for other closing costs. The DPAP funds can be used to cover closing costs or towards the 3.5% down payment. Income limits apply and vary by county.
And this program can be used to purchase any property that can otherwise qualify for FHA financing (ie: good condition, has a stove, closets, if condo; the tract is FHA approved, etc..).
Give me a call or email, to see if this program would work for you.