Down Payment Assistance Programs
First Time Buyers
July 28th, 2008
Lower home prices and Down Payment Assistance Programs make housing affordable to many working individuals and families in our area who were priced out just a year or two ago. This is definitely one of the silver linings of our current housing market. Not too long ago it was almost impossible to use DAP programs to actually purchase a home. If the buyer qualified on income there were very few homes that met the habitability standards required by the program. If the home qualified for DAP, it was most likely selling at a price the buyer could not afford to finance.
Not so today. There are now many more qualifying homes on the market that meet DAP guidelines at prices that fit the program. The key is being prepared. As the DAP programs require that you are approved before making the purchase offer If you wait until you find the right house to start the approval process you will most likely miss out on the best values.
There are a number of DAP programs available in Shasta County. Redding, Anderson, Shasta Lake City and Shasta County all have Down Payment Assistance Programs. While they are all somewhat similar there are important differences between them including income limits, housing price limits and repayment. Over the next few days I will be writing about the various programs. As one of our clients is closing escrow today on their first home using the Shasta Lake City Down Payment Assistance Program I have decided to start there. I would like to mention here what a pleasure it was to work with the program director Jessaca Lugo. She is very good at assisting the homebuyer through the process and worked closely with us, the primary lender and the buyers to insure a positive result.
The City of Shasta Lake DAP guidelines are published on their website and include link’s to print out the application. The DAP program is available to first time home buyers (defined as those who have not owned their principle place of residence in the last 3 years or displaced homemakers) whose income does not exceed 80% of the area median income, adjusted to household size. The property must be in the City of Shasta Lake boundaries and can be a single family home, condo or townhome on permanent foundation up to $225,000. DAP funds can be up to 40% of purchase price and repayment is deferred for 30 years at 0% interest. 3% of the total cost must come from the buyer/borrower.
For example, let’s say you qualify for the Shasta Lake City Down Payment Assistance Program and find a house to buy at $200,000. You would have a first mortgage of $120,000 with the lender of your choice. DAP funds would be $80,000 and your 3% investment would be used towards closing costs. With a 30 year fixed rate mortgage at 6.25% your monthly payment including taxes and insurance would be about $1,000.
Income Limits (Subject to Change) are 80% of: 1 person -$30,150, 2-$34,450, 3-$38,750, 4-$43,050, 5-$46,500, 6-$49,950, 7-$53,400, 8-$56,850
Feel free to Contact Us for a list of homes that fit DAP price guidelines.
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