HFA Mortgage Preferred: Down Payment Assistance Program For Buyers

Many people and places were devastated by the housing crisis. As individuals recover and look to re-enter the housing market, programs have been implemented to encourage buying in the areas that were hardest-hit.

Subsequent to the financial and housing crises, Phoenix, and many other cities, saw a rapid increase in the number of foreclosures resulting in a landscape abundant in vacant homes and empty neighborhoods. As the economy has recovered, so have the financial situations of many people. Those people are now in a position to re-enter the housing market. In order to bolster recovery and encourage buying in these areas, the Federal National Mortgage Association (Fannie Mae) has created the HFA Mortgage Preferred program to bring buyers and homes together and revitalize hard-hit communities.

WHAT IS IT?

What Phoenix buyers should be aware of first and foremost is that the HFA Preferred Mortgage Program is a grant, rather than a loan. Buyers who purchase a home with the assistance of the program need not worry about repaying the amount of the grant, which provides up to 5% of the purchasing loan amount toward the down payment on the property. Any qualified buyer can use the HFA Preferred Mortgage Program toward the down payment on a new or existing home, condo, or town home up to a value of $356,352. Manufactured and co-op housing is excluded, but properties comprised of up to 4 units are eligible, providing the owner occupies one of the units (or any property) within 60 days of closing, opening a nice window of opportunity for would-be investors.

WHO QUALIFIES?

The HFA Preferred Mortgage program is available to first-time and boomerang buyers alike. The only pre-condition pertaining to ownership is that the buyer does not currently own a home. In order to qualify, individuals still must meet many of the standard loan requirements modified to open the way for low-moderate income buyers. The max income allowable under the guidelines is $89,088 which must be accompanied by a FICO score of 640 or above and a debt-to-income ratio of 45%. Once all of these parameters are met, the buyer can apply for the grant to assist with the down payment on the eligible property.

GETTING STARTED:

Buyers looking to purchase a home in the Phoenix area can get started by visiting the federal or state department of housing websites and clicking through to the down-payment assistance programs. Applications can be made through either site and there you can also register for the required home buyer education courses as well as find a list of reputable home inspectors and other resources to help you on your way to Phoenix home ownership.

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