Tuesday, March 18, 2008
Down Payment Assistance for FHA programs.
Home prices have come down and now there seem to be more buyers in the market, taking their time, reviewing their options. Sellers want to attract these people to their places with options (outside of the Sub-Zero and Wolf Range). DPA's or DAP's as some people call them are the saving grace STILL AVAILABLE for FHA programs. DPA = Down Payment Assistance (DAP is the same thing but some people use this instead). The way they work is this: The seller lists their home with the with the program of their choice (Nehemiah and Ameridream are two of the biggest and nationwide). The cost to the seller is .75% of the loan or $500 whichever is greater. The Realtor can now advertise this property as true 100% financing (provided the price is within the FHA limits for the area) to the marketplace because the seller is in effect going to help with the down payment.The Seller may contribute anywhere from 1-6% to the DPA program they've enrolled in. This in turn allows the the DPA Program to contribute this same amount into Escrow prior to closing.The seller's Contribution comes out of the proceeds of the sale while the settlement statement is finalized and the transaction is seam-less.