< Back to JVM's Blog

JVM has Down Payment Assistance – But Is It Overrated??

Down Payment assistance has returned to the market, as many readers know. The assistance offered by various towns and cities is not the only program available now.

“Access” allows buyers to come to the table with as little as 0.5% of the purchase price. “Access” offers a 3% second mortgage (8.25%, 15 year) on top of a 96.5% FHA first mortgage. If the seller pays for closing costs with a seller credit, a buyer can use “Access” to get into a $300,000 home with only $1,500 out of pocket.

This is a great program for desperately cash-starved buyers.

BUT, the lenders offering this program charge rate premiums. Borrowers taking advantage of “Access” end up with a much higher rate on their first mortgage. This is typical of most down payment assistance programs.

We therefore encourage our clients to only use Down Payment assistance of any kind if absolutely necessary. We encourage borrowers to first try to garner down payment funds via gifts, savings, or even retirement funds.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 1197176, NMLS# 310167