1. Make sure the property is existing (previously occupied) and below the purchase price
limit of $195,700. If not, HOME DAP is eliminated. Proceed to question 3.
2. To ensure HOME DAP eligibility, ensure the following requirements are met:
â€¢ Household income below the HOME DAP income limits, available in the MRB
Program Guide, page 10.
â€¢ Borrower requires a minimum of $1,000 assistance, up to a max of $4,500, based on
need. Must use their own liquid funds in excess of two monthsâ€™ PITI before they
look to HOME DAP.
â€¢ Must go maximum allowed LTV on the first mortgage.
â€¢ Property must pass HQS inspection (Lead Paint).
â€¢ Cannot be used in conjunction with REO properties or FHA 203K streamline
If all of these are met, you must determine how much HOME DAP can be accessed.
This is total cash needed to close, minus seller concessions, minus borrower funds in
excess of two monthsâ€™ PITI. Whatever remains, rounded to the nearest $100, is the
HOME DAP loan amount.
3. Does the borrower or property meet one of the three Neighborhood DAP qualifiers?
â€¢ Is the property being purchased as an REO, foreclosure, bank-owned, or
short sale property?
â€¢ Has the property been marketed for six months or more?
â€¢ Has the borrower experienced a foreclosure, short sale, or deed-in-lieu in the
past and now credit qualifies?
If yes to any of these, the borrower qualifies for the $10,000 Neighborhood DAP.
Funds can be used toward the down payment or for closing costs and prepaids. Loan is
amortized over 30 years at 1 percent interest rate. The borrower must qualify with
second mortgage payment. If not, proceed to Regular DAP in question 4.
4. Borrower is eligible for Regular DAP up to $6,000 in $100 increments with a minimum
$500 loan amount. Regular DAP is amortized over ten years at 6 percent. Must go to
maximum LTV allowed on first mortgage amount. Borrower must qualify with second