AFR announces homebuyer program to grant 2% of purchase price, 6% of closing costs

DPA Advantage Program Guidelines

Borrower Eligibility – Must meet one of the following three categories outlined below

• First-time Home Buyer
  • Purchasing the subject property
  • Will reside in the subject property as their principal residence
  • Has no ownership interest in any residential property, for a period three years prior to the date of application.
    • The exception will be for an individual who is a homemaker or single parent with no ownership interest in a principal residence, other than a jointly owned property with a former spouse, during the three-year period prior to the date of the application
• Borrower(s) Income
  • The borrower, or borrowers if multiple applicants on the loan application, income must be equal or less than 140% of the state or county median income regardless of family size
    • To determine the median income use the following web tool to determine median income https://homeready-eligibility.fanniemae.com/homeready/
    • Borrower(s) income must be less than the median income * 1.4
    • If overtime income is not used to qualify the borrower, then the overtime income doesn’t not count towards the 140%
    • The income that the underwriter will use to qualify the borrower is what will be compared to the 140%
• Current or Retired Employment or Volunteer/Non-Paid Member
  • Any borrower on the loan application is a current, retired, or volunteer, which includes:
    • First responder (includes police officer, firefighter, public safety officer, paramedic, EMT)
    • Educator (includes Sunday school teacher, tutor, day care provider)
    • Medical personnel (includes nurse, doctor, phlebotomists, health ambassador, Red Cross worker)
    • Civil Servant in Federal, State, or Local Municipality
    • Military Personnel
• Borrower(s) must complete an 8 hour, first-time Homebuyer education course from a HUD approved Housing Counseling Agency. Click Here for a list of HUD approved counseling agencies
  • Online counseling is acceptable. Click Here for an example of one national counseling agency
  • Only one borrower must take the first-time Homebuyer education course
  • If the borrower has already completed another approved course that will be acceptable provided the course expiration is after the closing on the loan

Down Payment Requirements from Homebuyer

• When factoring in the DPA Advantage grant the borrower is responsible for a down payment equal to 1.50% of the purchase price (FHA 3.50% down payment, minus DPA Advantage Programs 2.00 Grant)
• The borrowers 1.50% down payment responsibility can come from flexible sources such as a family member gift or a loan against a 401k retirement account

Eligible Properties

• Existing homes
• New Construction
• Includes: single-family one-unit residence, townhomes, detached, condominiums, and modular homes

Interest Rate

• The interest rate on the DPA Advantage Program is significantly higher than a standard FHA Loan

Loan Type:

• FHA 203 (b)
• FHA 203 (k) Standard
• FHA 203 (k) Limited
• FHA Repair Escrow

Maximum Purchase Price

• The maximum purchase price is the lower of FHA maximum County loan limit or the conforming loan limit, which is currently $484,350
• Click Here to determine the maximum base loan amount for a FHA Loan, based on the County in which the property is located

Maximum Debt-To-Income (DTI)

• Maximum DTI limit is 48.99

Minimum Credit Score

• FHA: 580

Multiple Property Ownership

• Not permitted

Occupancy Type

• Primary residence only
• Non-occupant co-signers allowed, so long as the primary borrower meets one of the three requirements for the DPA Advantage Program

Repayment Requirements and Affordability Period

• None. Completely forgivable grant