Down Payment Programs for Buying Foreclosed Home for Sale
Potential buyers of foreclosed home for sale in Washington D.C and Virginia may avail of various down payment assistance initiatives as part of federal as well as local government programs geared towards improving the real estate market.
Industry experts said that many of these assistance programs to buy foreclosed home for sale have time constraints. They said that the programs are funded by the federal government and last only until the funds run out. They cited Washington D.C.’s Neighborhood Stabilization Program which ran out of money already.
The Obama Administration, in its economic stimulus package, offered an $8,000 federal tax credit to first-time homebuyers. In support of the initiative, the FHA allowed homebuyers to use loan mechanisms to get hold of the tax credit to be used as deposits or closing cost payments on loans insured by the FHA.
To encourage buying of foreclosed home for sale, the Housing Development Authority of Virginia established the Homebuyer Tax Credit Plus initiative last month. The initiative provides fixed-rate mortgages that are affordable and a second loan to be used as deposit and closing cost payments. For the second housing loan, no interest or even payment are required during year one.
The second housing loan offers a maximum loan amount of 5% of the total sales price that has no provision for cash back. The closing of the deal must be done before the stipulated expiration date.
Meanwhile, Prince William County, which has the most number of foreclosed home for sale in Virginia, launched its down payment initiative that offers as much as $30,000 to qualified borrowers. The money can be used by borrowers to shoulder cost for maintenance and repair after they have purchased foreclosed properties.
The Down Payment on Your Dream program was developed since buyers could often afford to buy a house but do not have the means to improve or make repairs badly needed on some repossessed homes.
Buyers who may qualify for the program should have a credit score of not less than 620. They may avail of loans with deferred payments and no interest. Also, if they decide to stay in the property for at least 10 years, no repayment of the loan would be required.
The Washington D.C.’s Employer Assisted Housing Program provides down payment assistance to employees who are buying a foreclosed home for sale for the first time. They may avail of deferred loans with a maximum amount of $10,000.
