Partners In Charity offers need-based down payment assistance between 2% and 10% of the final closing price on the purchase of single-family homes, condominiums, and multi-unit properties. (There is also financial assistance is also available for rehab programs.) If you qualify for an FHA loan or are pre-approved for an FHA home loan you are eligible to apply for down payment assistance from Partners In Charity.
There is only one requirement; you must intend to occupy the building you purchase. Down payment assistance for rental properties is not allowed under the Partners In Charity program. Funds can be used for closing costs and down payment, and this assistance can be listed as the source of down payment in the FHA loan pre-approval process.
Your lender is responsible for sending an application for the Partners In Charity program on your behalf. Because money from this program can be listed in your "good faith estimate" for sources of down payment funds, it's important to decide about applying for this program in the early stages of your planning. Your loan officer can help you determine your need and the correct amount of the down payment on the application forms.
Down payment assistance programs require the seller to pay a fee which is considered a payment for services rendered-- not a tax-deductible charitable contribution. Ask your loan officer for further information if you have questions.
Elimination of Non-profit Down Payment Assistance
On July 30, 2008, President Bush signed H.R. 3221 - Housing and Economic Recovery Act of 2008.
Section 2113 of the bill prohibits seller-funded DPA (Down Payment Assistance) for loans backed by
the Federal Housing Administration. Prior to this bill, the seller could contribute up to 6% to the buyer to
cover either a down payment or closing costs on an FHA loan. The changes became effective October 1, 2008.
Since this program is no longer available, we recommend that you get pre-approved for a low down payment FHA home loan.
Q: What happens if interest rates decrease and I have a fixed rate loan?
A: If interest rates drop significantly, you may want to investigate refinancing. Most experts agree that if you plan to be in your house for at least 18 months and you can get a rate 2% less than your current one, refinancing is smart. Refinancing may, however, involve paying many of the same fees paid at the original closing, plus origination and application fees.