Buy a Foreclosure With No Down Payment

The Indiana Housing & Community Development Authority (IHCDA) has come out with a new loan program for those who are interested in purchasing foreclosure HUD properties. You don't have to be a first time homebuyer either! The NSP (Neighborhood Stabilization Program) will be available starting on April 9th and basically offers assistance with the down payment, closing costs, the rehab costs or a combination of all three. There are different ways this program can be used as well- second mortgage, etc.

Here is a breakdown of the program:

• The DPA (down payment assistance) that you will be given is either 20% of the purchase price or $15,000, whichever is less (that is a lot of money!!!)


• Can be used with an FHA, VA, Conventional programs


• Must be an owner occupied property (so you can't do this for something you want to rent out)


• You have to take 8 hours of home ownership training (they do this so that people are fully aware of everything, and since they are giving you the down payment, it's probably worth it).


• Repairs by the contractors will be done before closing


• Homes that are 50 years and older may be up for 'historic review' (to make sure it's structurally sound and stuff)


• If you move in 5 years or less, you have to pay all of the down payment back. 6-10 years, it is pro-rated for 1/5 of the amount every year.


• Other requirements & information available.

There are also income limits to this program and other stipulations to qualify for the program. However, if you have had your eye on a home in great neighborhood that needs a little bit of tlc, or have thought about owning but nothing that "looks nice" is in your price range, this may be a great program for you.

1616 Yandes- 2BR/1BA & in Great Condition!

The list of homes that are available under this program is located at this website. I have a list of preferred lenders that you can talk to about this program or feel free to contact me with any other questions at rupton@c21scheetz.com if you are interested.

(There are other DPA & low interest rate programs for first time homebuyers for homes that don't need to be fixed up so feel free to contact me with any other questions)

A gift for me? Oh, you shouldn't have!

We all need a little help every now and then. Sometimes that help comes in the form of money! Ever thought about buying a home but did not have all of the down payment right now? The $7,500 first time homebuyers tax credit can be a great help. You can borrow your down payment from a relative and then pay them back using part of that credit. One of our lenders sent us this handy info which is below- list of the people that you are allowed to borrow the money from, for specific loans.


Conventional - Owner Occupied Property (this means that you are living in the house as your own home, meaning not renting it out):

• Relatives
• Domestic partner
• Fiance
• Church
• Municipality
• Nonprofit organizations

The rules are different if this is a second/vacation home or an investment property.
If the LTV/CLTV is 80% or less, the entire down payment may be a gift. Otherwise it is 5%.

Investment Only - Gift funds allowed only under the following conditions:
1-unit Single Family Residence (SFR)/condo/Planned Unit Development (PUD)
Maximum LTV of 70%
Minimum down payment of at least 30%, of which at least 20% must come from the Borrower's own funds




FHA (3.5% down)- Owner Occupied Property:

• A relative of the borrower.
• The borrower's employer or labor union.
• A charitable organization that does not receive funding from seller/builder contributions (see below).
• A governmental agency or public entity that has a program to provide homeownership assistance to low and moderate income families or first-time homebuyers.
• A close friend with a clearly defined interest in the borrower.

A gift from any other source is considered an inducement to purchase and requires a reduction to the sales price.

Donors may borrow gift funds from an acceptable source, i.e., not from a party to the loan transaction including the mortgage lenderPlease be aware of the difference between the two.

These are rules for all lenders that use FHA or Fannie Mae(which is pretty much the two agencies the majority if not all lenders are using)Everything is a paper trail and most lenders if not all will want to see a two month period possibly three. Unusual deposits that are not consistent with normal direct deposits or can be verified the borrower better be able to explain where the deposit came from and document. This is how lending is these days.


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If you have questions about getting pre-approved for a mortgage or down payment stuff (or you were just confused by this whole post) feel free to contact me at rupton@c21scheetz.com