There are all kinds of Down Payment Assistance Programs available. A few of them are excellent, but many are so disadvantageous that we steer people away from them. An example of an excellent program is San Francisco’s HERO program. HERO offers $20,000 silent seconds (with no payments) that get waved altogether after a fixed period of time. But this program is an anomaly.
Many other programs result in huge delays, higher fees, and much higher rates overall. We know of one buyer who recently closed a purchase with Down Payment Assistance in Alameda County, and her interest rate ended up at 5.75% (almost a full percent HIGHER than the market rate, simply because the buyer could not scrape up 3.5% for a down payment).
Our point is that buyers are usually far better off if they can somehow scrape up a “gift” for a down payment and then using standard FHA financing.
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 1197176, NMLS# 310167