AmeriDream is a non-profit organization which helps low and moderate income families to buy homes with a free down payment assistance gift. Those who meet the income requirements and qualify for an FHA loan are eligible to apply for AmeriDream. This program offers assistance for up to 10% (typically 3%-6%) of the purchase price.
To participate in the AmeriDream down payment assistance program, buyers should;
Get pre-approved for an FHA mortgage and start looking for a home.
Make an offer and get a contract.
Ask your loan officer to apply for AmeriDream in your name.
Once your application is approved you will receive a notice from AmeriDream and you can proceed to closing. The seller must participate in the AmeriDream program and pay a fee. Your loan officer may be able to help a seller sign up for the program (by showing where to apply).
AmeriDream is intended for low-to moderate income families, but there are many down payment assistance programs with no income requirements, asset limits or credit checks. If your income disqualifies you from AmeriDream, explore other options with non-profit agencies that allow higher incomes or with more lenient requirements.
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.
A: Discount points allow you to lower your interest rate. They are essentially prepaid interest, With each point equaling 1% of the total loan amount. Generally, for each point paid on a 30-year mortgage, the interest rate is reduced by 1/8 (or.125) of a percentage point. When shopping for loans, ask lenders for an interest rate with 0 points and then see how much the rate decreases With each point paid. Discount points are smart if you plan to stay in a home for some time since they can lower the monthly loan payment. Points are tax deductible when you purchase a home and you may be able to negotiate for the seller to pay for some of them.
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