We’ve covered the VHDA down payment grant option before, but let’s discuss a more local assistance program that is available from the Blue Ridge Housing Network.
The HDPAP down payment assistance program offers a down payment in the form of a second mortgage. The HDPAP program allows the loan to be deferred though, meaning you don’t have to make payments on it and it is zero percent interest, it gets repaid when you either sell the home, transfer ownership, refinance your first mortgage or move into another home. Obviously that can save you a lot of money over the course of the time you live in your home, your mortgage payments will be lower since you don’t have to make payments on the second loan.
In addition to the down payment, the program can also help with closing costs. Eligible buyers can get up to 10% of the purchase price of the home, and whatever is not used for the down payment can be placed towards the closing costs.
So let’s discuss who is eligible. The program is for first time buyers, or those that have not had primary ownership in a principle residence within the most recent three year period. The buyer must complete a home buyer education course, have a credit score of at least 620, provide 1% of the sales price of the home from their own funds for buyers at 50% or higher of the area median income or a minimum of $500 for buyers at less than 50% of the area median income, and the total household income must be between 30-80% of the area median income. The income guidelines are different for each county and family size, so contact me if you want to see if you qualify!