A downpayment is one of the biggest roadblocks to homeownership. Often equaling thousands of dollars, even a 5% downpayment can seem impossible to many would-be homeowners. But a downpayment assistance program can help.
Using downpayment assistance programs like the one offered by Lakeview Loan Servicing, and with the help of our resourceful team, you can get the right financing for a wonderful home!
This program is associated with Springboard CDFI, an established non-profit that provides a variety of services to the community. Their overall mission is to assist low- and moderate-income borrowers to obtain housing. This goal is often achieved by assisting people with their downpayments, which can be extremely difficult to build when budgets are tight.
Through Springboard, Lakeview Loan Servicing has partnered to create the Lakeview No MI with Community Second program, which can be a useful option when you are searching for a home but don’t have a large downpayment.
Lenders and borrowers are often interested in making sure their loans follow the guidelines of Fannie Mae, one of the most important lending institutions in the country. In this case, the program does qualify under Fannie Mae’s guidelines.
The Lakeview No MI Community Second Program
As you will see, this program allows lenders to offer top-quality loans, increasing the chances of securing the perfect property for your future. This program is an important alternative to loans that have mortgage insurance, including FHA loans that have mortgage insurance throughout the life of the loan.
Best of all, they are available as financing with loan-to-value ratios between 80.01% and 97%, all while eliminating the need for mortgage insurance. In most cases these types of loans would need insurance, which protects the lender, reduces risk of default, and increases the chances of approval, but also costs the borrower a monthly fee.
This is an important and historic housing program, as it is the first to be paired with a Springboard to Homeownership Interest-only Second Mortgage for downpayment and closing costs assistance, which can be up to 4%. There is no dollar cap, making it more attractive to many buyers.
The lender will fund both the 1st and 2nd in their name, and will use deregulated underwriting only. Also, it can only be used by retail-only originations. All of that may seem inconsequential to you, the borrower, but it is an important component for these loans.
This program is available as a fixed 30-year term and comes only with the purchase of a primary residence. It can be used on a Fannie Mae conventional loan or a HomeReady loan, and is available for conforming and non-conforming high balance loans.
However, a 660 credit score is required. This is not a uniquely high score, so many borrowers will be eligible, but it may eliminate some people. Fortunately, there are ways to improve your credit so you can increase your chances of using this program. There are also debt-to-income ratio requirements, so speak with a lending agent to see if you will be eligible. Unfortunately, you will not be able to use income from non-occupants like co-borrowers and co-signers. Tax transcripts may also be required depending on your situation.
You will be subject to income limits, as the program is meant only for people with low to moderate incomes. So your income needs to be somewhere in the middle: not so high that you can afford a downpayment on your own, but not so low that a mortgage would be a financial burden.
No matter what, homebuyer education is required.
This program uses Desktop Underwriter to determine eligibility, so manual underwriting and the use of non-traditional credit sources is not permitted. This will not hold up most loan applications, but it could cause problems for a small number.
What Properties are Available?
When you use this program, you can choose from a wide variety of different properties and still take advantage of the downpayment assistance. Of course, you can use the financing to purchase a single-family detached property, as well as a single-family attached property. It can also be used to purchase a PUD, as well as a condominium. If using the program to get assistance for the purchase of a PUD of condominium, you will need to refer to Fannie Mae’s seller guide for information.
Paired Second Option
If you used this program, you can get a 30-year term with an interest-only second mortgage for the downpayment and closing cost assistance. The second mortgage interest rate is equal to the interest rate on the first.
The second mortgage loan amount is equal is up to 4% of the lesser of the appraised vale or purchase price, with no specific cap on total dollars.
What Fees Will You Have to Pay?
Like all mortgage products, there are some fees associated with the program. In this case, you (the borrower) will likely have to pay all fees paid to government entities to record the second lien, which will likely go to the specific state or jurisdiction where the property is located. You will likely also need to pay any prepaid interest where it is applicable. However, no other fees can be charged to borrowers using this helpful program.
The Documents Needed to Work in This Program
Of course, you will also need documentation for using this program. You will need to bring Homebuyer Education Certificates, proving you have completed the education requirements, and you will need interest-only overview and agreement documents. There will need to be a signed and notarized original second note with the lender as the beneficiary, and a copy of the signed and notarized second deed of trust with the approved lender listed as the beneficiary.
Any applicable property riders should also be included.
If you bring these documents and meet the requirements for income, credit, and other factors, you may be able to use this helpful downpayment assistance program!
Get the Assistance you Need for a Mortgage Downpayment
As you can see, this is a highly effective assistance program that can help you generate a downpayment for the purchase of a world-class property. If you want to learn more, contact our staff and let us help you take advantage of this downpayment assistance program!
“Chad Baker is THE BEST, most professional, understanding, HONEST person I’ve ever worked in the mortgage industry. He knows exactly what he’s talking about, will never promise something he can’t deliver, and will bend over backwards to get you what you need. I had a very unique problem qualifying and every other mortgage company I worked with assured me from the beginning that they could get me financed, and then it would all fall apart once we hit underwriting. Chad understood my circumstance from the beginning and patiently explained every step of the way. I can’t thank you enough Chad! Juliann has been great keeping me updated and making sure that everything comes together in a timely fashion. She also appreciates my sense of humor, which gives personality to a boring funding process. Thanks Juliann! I HIGHLY recommend Home Point and if I ever buy another home, will absolutely use them again.”
As a first time home buyer, I wasn’t sure what to really expect, but Chad and his team made the process very clear and easy. Once the process was over, they didn’t just vanish either. They kept in touch and looked for opportunities that may benefit me. A couple years later, they found me a great refinance opportunity that saved me a lot of money! Once again, the process is long and grueling, but Chad and his team made it as painless as could be. Any barrier that I encountered, they found a quick solution to make it happen. Mortgages are a huge commitment and I wouldn’t pick any other team to help me make the right decisions.”
When looking for a house, we had couple recommendations for a lender. After talking with all the lenders, many were difficult to work with and couldn’t get it done as quickly as we needed. I was referred to Chad Baker’s team and I am glad we did. Not only did they get the things done quickly for us, they were very easily to get ahold of. It wasn’t rare to get a response within 15 minutes whenever an email was sent. I could not express how friendly and outgoing this team is. And on top of that, they came back with the best offer for us amongst all the other brokers. I am glad I worked with these guys. If you are looking for a lender…MAKE SURE TO CALL CHAD BAKER AND TEAM!!! Thanks Chad for all your hard work. Next time we buy another house I am calling you first!