FHA prohibits ANY contribution towards down payment from a seller or other party with a financial interest in the transaction.
Here is the text of the law:
"`(C) PROHIBITED SOURCES- In no case shall the funds required by subparagraph (A) consist, in whole or in part, of funds provided by any of the following parties before, during, or after closing of the property sale:
`(i) The seller or any other person or entity that financially benefits from the transaction.
`(ii) Any third party or entity that is reimbursed, directly or indirectly, by any of the parties described in clause (i).
This subparagraph shall apply only to mortgages for which the mortgagee has issued credit approval for the borrower on or after October 1, 2008."
Paragraph A as referenced above:
"`(A) IN GENERAL- A mortgage insured under this section shall be executed by a mortgagor who shall have paid, in cash or its equivalent, on account of the property an amount equal to not less than 3.5 percent of the appraised value of the property or such larger amount as the Secretary may determine."
If you seek conventional financing (ie not FHA, VA, or RDA), Fannie and Freddie regulations do not permit a seller to contribute towards the buyer's down payment.
There are a few lenders that have special programs where the seller can contribute up to 3% of the purchase price for your downpayment on your behalf. This allows you to essentially finance your downpayment. (this is not affiliated with Ameridream or Nehemiah)
Why do you feel you do not qualify for the Ohio Housing Finance Agency grant? What is your total household income?
The main program for you would be FHA/OHFA (The Ohio Housing FInancing Agency), It's the only true 100% loan out in this market today and will be your most viable option. Feel free to call me and I will try to get you qualified. I wouldn't reccomend going through a broker because you will pay more in closing costs, and in this market everyone had the same products anyways. If you have already tried this route, you need to wait a year or more and work on repairing your credit. Best of Luck!
A top mortgage broker has access to a wide range of mortgage loan products. You didn't mention who you have talked with regarding financing but in Central Ohio I typically recommend Debbie McCloud of Concord Mortgage. Her direct number is 614-833-5860. If she doesn't have a program that will work for you she can often refer you to a lender that can help. - Dan
With the mortgage industry tightening their lending programs, a lot of the home buyer programs are being phased out or the guidelines are more strict than in previous years. There are a couple of banks who have their own programs for first time home buyers assistance and Ohio bond money is also available. Please email me at email@example.com for a list of lenders you can speak to for all the details. There is no cost or obligation.
Yes, there are a couple of different 1st time homebuyer programs for residents of Ohio other than the two that David mentioned. David mentioned a couple of programs that have helped a lot of people get into new homes:) email me for specifics....firstname.lastname@example.org