It’s funny how research can change a situation; more information leads to communication. Coming down off of a natural euphoria after finding this amazing RealTea nugget. Before we dive into this latest finding, I want to shout out my subscriber Shelia The Cheap Traveller for getting me started down this rabbit hole.
If you’ve seen my latest video on my YouTube Channel or read the article before this one, I discuss a down payment assistance (DPA) program in Gaithersburg, Maryland. The program offers from $12,000 or, in some cases, up to $25,000 depending on the situation. Jet over to that article or video after this one and read-up on it. But to the point, her comment was about her use of that program to get into a home. So, of course, I needed to know more about this financing option, and, in true form, I created content to share that information with you all.
In this very moment, I have a particular client that is looking at about $14,000 in down payment/closing cost. I believed that he was fine with that because he didn’t have any particular objection, but I wanted to know if there was a way for me to get that number down. Fun fact about me, I used to be a coupon-er. Like a serious coupon-er, my sister got me started and we both would battle to rack up hundreds in grocery bills and then walk out paying two dollars. So, trying to figure out how to get that number down became my new target. Plus, if I figured this out, I could apply it to the other six clients looking in this same area. The hunt was on.
$281,148.03. What significance is this number to you? Well, it represents, as of July 1, 2020, the amount of funds available to assist with down payment and closing cost assistance. Now, let’s get specific, in Prince George’s county, their Pathways program offers first-time home buyers up to $10,000 in down payment and closing cost toward the purchase of their first home. Some of you will sit back and say, this isn’t going to be enough to help me actually get into a house. And that is 100% accurate. But, for many people their first paycheck of the month doesn’t cover all of the household bills, so you split up when you pay things. The same concept is true here, this is just one program that you can use, along with others, that will help you fill the financial gap and help you get into a home.
Let’s continue. This is a zero percent interest, deferred payment loan. What this means is that you don’t pay anything monthly on this loan and it can be forgiven if you remain in the property for 10 years. The loan has to be paid back, in full, if you sell, transfer or cease using it as your primary residence.
The program is available to home in Prince George’s county as long as the purchase price limit, for resale, is $323,000 or less, and for new construction $401,000 or less.
The lender has to be approved, and a comprehensive list of those lenders can be found here. I’ve worked with several and can give you a few recommendations as we work together. Plus, all applicants must complete an 8-hour housing counseling course provided by a certified Housing and Urban Development housing counseling agency. For a list of those agencies, you can go here. I highly recommend completing the 8-hours before you place an offer on a property, this way you’re less stressed and already have the credentials needed in hand. Plus, your application cannot be reviewed until the training hours have been completed.
Now, the application process. Believe it or not, there isn’t anything for you to do. The work is all done by the lender which is why you have to work with an approved lender. The lender is or should be familiar with the process. They will complete the application on your behalf and get the ball rolling. There are a few things that your realtor will also need to do, so ensure they have some knowledge about this program. And if they don’t, well you should probably be working with me anyways.
Keep in mind that just because a lender is on the list of approved lenders, the particular loan officer you’re working with may not even know about this program. Don’t believe me, I am dealing with that right now. The approved lender, or in this case the loan officer at the approved lender, is unfamiliar with this program. Guess what…if the lender and I both chose to remain ignorant then my client would be the real loser. In this case, my client is in for a pleasant surprise and will come to the table with almost nothing.
In the immortal words of someone, ‘knowledge is power.’ With this new-found knowledge, I look forward to working with you to build a plan to obtain the financing you need and get you into the home that works for you and yours.
Brandon Scott is a licensed real estate agent in Washington, DC, Maryland and Virginia. His license hangs with Coldwell Banker Dupont-Logan, DC. He’s been involved in the mortgage finance industry for the last 16 years in various fields. You can reach him by email at [email protected]. Subscribe to his YouTube Channel at RealTea DMV