Pro's and Cons of Down-Payment Assistance
For many, the dream to purchase a home is far fetched because of the lack of cash for down payment and closing costs. There are several programs in Georgia that assist buyers with funds to purchase their first home. Find out more information on the pro’s and con’s to downpayment assistance below:
Pro’s
Ability to have the cash necessary to purchase with only a minimum of $1000 down.
Special programs for teachers, first responders, and healthcare professionals.
Down-payment funds in the amount of $5000, $7500, and $15,000.
The choice to work with various lenders who participate in down payment assistance programs.
Lower credit scores are able to participate. 580 is the minimum credit score.
Con’s
Closing costs typically increase vs. bringing your own funds. Georgia Dream can charge an additional $3100 for a funding fee. Making your total down payment assistance actually $1900.
Down payment assistance must be paid back when you sell for some programs. Other programs require you to stay for 5 years prior to vacating the property or you’ll have to pay the funds back due immediately.
Some programs dictate what type of property you can purchase and where you can purchase. For instance, the $15,000 Ga Dream down payment assistance only is allowed for resales.
The approval process takes longer for some programs and underwriting occurs twice, once with the lender and once with the assistance program. This can extend the closing date, and if you are in competition with other buyers for a home, another purchaser may be selected since they can close sooner.
Some seller’s/agents do not look favorably on down payment assistance programs because of the many complications they can cause. So, it might hurt your chances of finding a property if you present an offer with down payment assistance.