There are a lot of programs available to first time buyers to assist with down payments and closing costs! One of the most popular choices is the PHFA program which is a soft-second mortgage offered in the state of Pennsylvania. It is an interest-free loan and the maximum amount is $6,000 or 4% of the purchase price (whichever comes first).
Another popular option is the Sapphire grant program which offers up to a 4.5% down payment. Plus, because it is a grant program, buyers are not obligated to repay. It’s important to note, however, that there are extra requirements to qualify (including taking a class) and higher credit score requirements. As with many mortgage programs, some income limits and other restrictions may apply.
These programs work in conjunction with existing loan programs, including FHA, VA, and USDA loans. For example, an FHA loan requires a 3.5% minimum down payment. Because the Sapphire grant offers up to 4.5%, if this grant is combined with the FHA program, then the buyer’s down payment is covered and there is a little left over for closing costs.
Plus, there are plenty of other programs available. To learn more about programs that you may qualify for, and the benefits of each program, be sure to reach out to Mark Mawby of Freedom Mortgage at mark.mawby@freedommortgage.com