Are there any good first time buyer programs out there for down payment assistance?

Asked by W.b., Los Angeles, CA Thu May 1, 2008

I'm a first time buyer who can afford a mortgage payment but I don't have the 3% down that lenders are now requiring. No one is doing 100% financing anymore? I heard about the Nehemiah program but that's supposed to be seller financed and i'm interested in an REO or a short sale and I can't imagine why they'd agree to that program.
Surely, there must be some programs out there, for the L.A., Pasadena, Monrovia area, that would be available; or am I out of luck in this market? Looking to buy in Pasadena,Monrovia, Arcadia or Duarte.

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Sheryl Arndt, Mortgage Broker Or Lender, Woodland Hills, CA
Thu Mar 16, 2017
Yes, If you are buying a primary residence you could consider a down payment assistance program such as CalHFA or Sapphire Grant which can cover your down payment and closing costs. You may close with minimal out of pocket expenses. You may consider the CalHFA from a minimum 640 fico score and the Sapphire Grant from a minimum 620 fico score up to 424k.

You may qualify FHA from fico scores between 500-579 with 10% down or minimum 580 fico score may qualify FHA 3.5% down up to 424k. You may consider 3% down conventional from a minimum 620 fico score or even 5% down conventional with NO Mortgage insurance (Lender paid MI) up to 424k.

Your qualifications will be determined by your credit profile, debt to income ratios, fico scores, loan program and how much you want to invest into the down payment and closing costs. Your fico scores can be raised within 3-4 days in most cases to qualify for programs, rates and terms as necessary.

If you decide you want to buy you will need to be pre-approved to be able to meet an agent to view and submit offers on any homes of your choice. You will need to gather some documentation for each applicant.

If you figure out what cities/zip codes you are considering, minimum number of bedrooms and the maximum payment/price you are looking to achieve any agent can email listings to fit your search criteria. Your email address is needed to set you up for the automatic daily updates.

Sheryl Arndt, Real Estate Broker - Sr. Loan Officer CA only
Veteran and VA or CalVet loan specialist
REO and Short Sale Specialist
Credit Repair At No Cost
ALL Loan Programs Available
24+ Years Experience
BRE# 01140252
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0 votes
Gary Sund, , Saugus, MA
Wed Sep 10, 2008
Bank of America should be your first choice. If they can't do it, you're probably SOL !
0 votes
Jonathan Tay…, , Orange County, CA
Wed Sep 10, 2008
have you rrelatives give you the 3%
it ani't gonna get any better. Inrerest rate is down again because of fanny and freddie takeover
Click below for all listings in Pasadena, Monrovia, Arcadia Duarte etc…
0 votes
Jeri Creson, Agent, Studio City, CA
Wed Jun 25, 2008
There are down payment assistance programs available. Depending on your income level, you may qualify for the City of Los Angeles American Dream Downpayment Initiative program, which is a 6% assistance program. There are also WISH funds, Nehemiah, CalHFA Chdap funds, amongst others. I specialize in first time homebuyer programs, and buyers with disabilities. Virtually all of my clients receive some form of down payment assistance. I have had success with both REO and Short Sale properties with down payment assistance, however, you must be realistic. It's important to understand that the seller will take the offer that offers the most overall value. Sometimes that value isn't always the highest price. Sometimes it's more favorable terms or a more reliable loan package that can be closed in a shorter time frame. So expect some disappointments, and be prepared to make a few offers. It can be disheartening to lose a property that you had your heart set on, but eventually, you can succeed. Keep trying and don't give up! Find an agent who understands these programs and is willing to stick with you for the long haul -

I recently closed a transaction for a disabled buyer who purchased a free standing home in Torrance, layered three different down payment assistance programs plus a special subsidized interest first mortgage (4%), and came in with a PITI under $1,900 per month. It CAN be done - Good luck to you!
0 votes
Jeri, how can I reach you???
Flag Sun Feb 26, 2017
Sam, , Pasadena, CA
Mon Jun 9, 2008
Hi W.b. You're correct that most of the first time buyer programs require the seller to participate. You're probably right that banks wouldn't agree to participate on short sales, but for REOs that have been on the market for months and months, I wouldn't rule it out. I tried to find a good source for this data that's accessible to non-agents, but I couldn't find one. Trulia tells you whether it's more than 30 days, but it will probably take six months or more before the banks are really ready to make extra accommodations like down payment assistance.

Another option I'm working on with a buyer is buying a house that is being foreclosed using "subject-to" financing. Essentially, it means taking over someone's existing payments on their loan, rather than getting one of your own. You would need a little bit of a lump sum to help the homeowner get current on their payments, but it could be less than the 3% for the FHA in many cases. There is more risk associated with this approach, but you're asking for your options, and this is a legitimate one. If you're interested in doing this, you should work with with an agent, because if you don't do it right, you could end up being foreclosed on yourself. But people use this approach every day, especially in LA County. If you want more information, you can search "subject-to financing" on a search engine.

I'd be glad to help however I can if you want to pursue something like this. I'm located in Pasadena.

Sam Pritchard
Keller Williams Realty
0 votes
Laarni G. Om…, , Orange County, CA
Fri May 2, 2008
Hi W.b.,

I got an REO in escrow and they used Chfa. I think it was 1% down.How about VA? Also, call the city you want to buy a house in and see if they have community development funds.

0 votes
W.b., Home Buyer, Los Angeles, CA
Fri May 2, 2008
Unfortunately, the homes that I've looked at in my budget all happened to be REO's or short sales. Are there any down payment assistance programs I could use? I saw an REO i'd love to make an offer on but without downpayment assistance, I'd be out of luck.
0 votes
Laarni G. Om…, , Orange County, CA
Fri May 2, 2008
Hi W.b.,
FHA just came up with buyer assistance program where sellers are participants by "gifting" the buyers up to 7%. Also, ChFA's programs are pretty affordable. E-mail me should you have any questions on these programs.
0 votes
Karen Miller, Agent, Long Beach, CA
Fri May 2, 2008

The Nehemiah is a great program.

Why do you want to buy an REO or Short Sale??? Short Sales are extremely difficult & as a buyer you have even less negotiating power than an REO, which is much less than you have with a traditional sale. You're right that a bank or an upside down seller will not help with your financing.

It is true that the number of REOs on the market have pulled down pricing. Traditional sellers have to compete with REOs so there price is often the same as REOs - sometimes less, sometimes more. The old belief that you were always getting a deal when purchasing an REO just isn't true anymore.

Why don't you find a reputable Realtor in your area?

Karen Mlller
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