Nikki Waller, Director of Financial & Relational Development
In the next few minutes I’m going to tell you how to get $12,400 in down payment assistance, what will qualify you for this grant, and who to contact to get started. Your window of opportunity is small for these funds – they open in mid-April and are usually gone in mid-July. They’re first-come, first-serve and there is no wait list.
First, you need to qualify for a mortgage. There are a lot of misconceptions about what your credit history and income level need to be to qualify. If you have an income below 80% of the Area Median Income (AM), you could qualify for the Home Ownership Program. For this plan, you need to contact a bank that has HOP funds.
HOP is an income qualified program that will provide an $8,000 grant and requires a $1,000 contribution. This $1,000 can include the money you spend on an inspection, earnest money, or other expenses you have related to the purchase of a home.
Several banks in our area have this program. Ask your bank if they have HOP funds available and if you qualify. If your bank doesn’t, contact Tony at HOPE and he can provide specific contact information for banks participating in the area.
Some restrictions with HOP funds – you can’t buy a fixer-upper. The home must pass a home inspection and a pest inspection. Also, you must income qualify. As we mentioned before, your income must be below 80% of AMI.
In addition to HOP funds, you can also utilize HOPE’s down payment assistance (DPA) program. For HOPE’s DPA program, you have to spend $1,000 out of pocket. This money will then be matched 2:1. The good news, this $1,000 can be the same $1,000 used for HOP funds.
You read that right, for $1,000 out of pocket, you can combine HOPE’s DPA with HOP funds and have an additional $10,000 towards the down payment on your home. You must agree to live in this home for 5 years, but you walk into your home with substantial equity.
If you income qualify for HOP Funds, you’ll income qualify for HOPE’s DPA. The programs are identical in qualifications.
But wait, I said that I could tell you how to get $12,400…
This is where we utilize the Individual Development Accounts (IDA) available through HOPE as well. Click here for a full explanation of IDA. IDAs will match $800 the first year with $2,400 (a 3:1 match). This money must be separate from the $1,000 used for HOP funds and our DPA. But, for an additional $800 out of pocket, you will have the remaining $2,400 in grant money. Your total down payment on your home will be $14,200 (including the $1,800 you came out of pocket).
The great news about this is that you still have more match opportunity in year two of an IDA. In the second year, IDA will match $700 on a 3-to-1 basis, giving you an additional $2,100 in grant funds to do some necessary home repair or remodeling.
So, just a breakdown…
Step 1: Find out if your bank has HOP Funds. If not, contact Tony at HOPE to be referred someone who does.
Step 2: Qualify for a mortgage at that bank. Some banks offer mortgages to people with credit scores as low as 600 and 2 years of work history (only 1 year at current job).
Step 3: Open an IDA through HOPE and begin DPA process with Tony (812-423-3169).
Step 4: Find a home before HOP funds run out.
Step 5: Come out of pocket $1,000 and put $800 into your IDA.
Step 6: Have an additional $12,400 in matching funds added to your down payment.
Step 7: Close on your home.
Step 8: Move in and celebrate.
Step 9: Begin your savings plan for your first home project using the second payout of your IDA.
Okay, I could’ve stopped at step 7…
Don’t think you’ll qualify for a mortgage? Contact Tony at HOPE. He knows about several programs targeted toward people who think they have no hope of becoming homeowners. He also knows what steps you’ll need to take to recover from bad credit or financial decisions.
Last, these funds are a limited supply and they are utilized fast. You must walk into the HOPE office and fill out an application in order to get started.
We hope to see you in our door soon.. but hurry, the clock is ticking!