Down Payment Assistance Is Improving Grant CHFA Goes To 4 Percent

Dated: 02/06/2017

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CHFA is expanding and enhancing its down payment assistance options for purchase loans to give your borrowers more choices. In early March, the following changes will occur:

·         CHFA DPA Grant

Available for up to 4 percent of the total first mortgage loan amount, the grant may be used for down payment, closing costs, and/or prepaids. This increased flexibility gives your borrowers more ways to use the grant as needed for their home purchase. This 4 percent grant will replace the current 3 percent CHFA DPA Grant.

·         Zero-percent Second Mortgage Loan

Available for up to 5 percent of the total first mortgage loan amount, this product will be a subordinate zero-percent interest mortgage with no monthly payment, but it must be repaid after the payoff/refinance of the first mortgage loan in accordance with the promissory note. It may also be used for down payment, closing costs, and/or prepaids. This product will also have a lower interest rate than the grant, offering your borrowers another affordable assistance option.

·         1 percent Borrower Premium
The current 1 percent Borrower Premium available for purchase loans will be eliminatedwith the introduction of the new 4 percent grant and the 5 percent second mortgage. All Borrower Premium options will remain for refinance loans.

Please note, borrowers may only select one of the two available down payment assistance options. The grant and second mortgage cannot be combined on the same transaction. Both are only available for select purchase mortgages. 

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LaDawn Westbrook

With more than a decade of experience, LaDawn enjoys educating first time home buyers, working with the 55+ community, relocation clients, sellers who want to downsize, step up purchase or anything in....

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