Down-payment assistance program helps builders, buyers

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Mary Worm is a loan officer with Farris Mortgage.|ret||ret||tab|

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There are numerous people who want to buy a home, have the employment and credit to qualify for a loan, but do not have the monies necessary for the down payment and closing costs. |ret||ret||tab|

A down-payment assistance program can help bridge this gap. The program has helped jump start new housing subdivisions by stimulating sales to an increasing pool of buyers, and has added affordability to housing markets by taking away the major obstacle to the average home buyer in the United States lack of a down payment. |ret||ret||tab|

The marketing potential for buyers who are in need of this program is as diverse as it is large.|ret||ret||tab|

Individuals who have just joined the work force and lack the savings for their down payment.|ret||ret||tab|

Couples with comfortable incomes but with large families who might not have the down payment to purchase a house to accommodate their family comfortably.|ret||ret||tab|

Couples who are newly married and purchasing their first house together. |ret||ret||tab|

A down-payment assistance program can enable builders to develop more properties in one area with the confidence that they will sell in a rapid fashion. |ret||ret||tab|

Participating in a down-payment assistance program involves making a contribution to a general fund. However, this contribution has many benefits to the home builder. |ret||ret||tab|

Imagine how many more prospects will inquire with a "zero-down with no closing costs" advertisement. Builders using this program generally enjoy increased sales velocity by selling their homes at full appraised value verses a negotiated or competitor-driven value. |ret||ret||tab|

Keep in mind that the sales price cannot exceed the appraised value of the house. Selling homes faster and at full appraised value will only maximize net proceeds. With this program builders can reduce carrying costs, increase marketing exposure and decrease sales time. |ret||ret||tab|

A common misconception is that assisting with the down payment ends up costing the builder in the long term. This is not the case. When builders make a comparison, they often net the same or more from the transaction. Typically, it can take weeks or even months to sell a home. Most builders are anxious, often reducing their prices and making other concessions in the process of selling their homes. |ret||ret||tab|

It is common for a builder to negotiate the sales price in order to make a sale. By using this assistance program they are more likely able to obtain full listing price for the home and make a quicker sale.|ret||ret||tab|

There are no additional requirements to have access to this funding. Once a buyer is prequalified with a mortgage lender, he is automatically eligible for the gift money to use for the down payment as long as the seller has agreed to participate in this program. |ret||ret||tab|

Now clients can take advantage of the flexible credit standards of FHA, making it a little easier for buyers with credit slips or who might be a little short on cash to purchase their dream home. |ret||ret||tab|

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