H.O.M.E The Lender - What are some of the benefits to you?

When your Borrower does not have enough for the down payment or is faced with cleaning out their bank accounts to cover down payment, they start to worry – “What happens if a problem occurs and I have to get it fixed?” That’s when they start to shop for a lower rate to reduce their payment. Why not say, “I have a great program available that allows you to leave your savings alone.” This way the Buyer can keep their funds available for an emergency. Not only does this relieve some of the Buyer blues, it makes your borrower a better risk by having a cash reserve after Closing.

If your Borrowers need more than a traditional down payment amount the nonprofit has many properties that may be perfect for their needs.

Why Use a Grant?

As a broker you provide a service. Expand your level of service for your client by recommending a HOME Grant.
...........................................................................................................

These types of down payment assistance programs are typically broken into two types of
programs. One is a gift and the other program is a loan/lien Our program is a gift program with no repayment of any kind. These are the 501 (c) (3) Non-Profit organizations or county, city, state backed down payment assistance programs.

The 501 (c) (3) non-profit down payment assistance programs will typically require the assistance of the home seller in order for the buyer to take advantage of the program.

Provide the down payment and/or closing costs.
Document the equity in the property.
Increase your case load and help you maintain it.
Close deals!

Now What?

If you have a client or an investor that would benefit from using the grant program or who has asked specifically about whether or not they can take advantage of a down payment assistance program, we suggest you read the step by step instructions we've included below. If you have any questions about how to proceed, please contact us.

Instructions

The process for the MISSION BRANCH-HOME Grant program is simple. Just follow these steps:

Have the Borrower complete the HOME Application.
Submit a signed Application to the HOME office via snail mail or fax to 720 535-5188.
Pre-qualify the Borrower for a maximum loan amount and maximum loan-to-value (LTV). After you have qualified the Borrower, take the maximum loan amount and divide it by the LTV and that equals the suggested sales price on the potential purchase.
Confirm with your underwriters that they accept gift funds.
Contact the Borrower’s real estate agent or housing provider and explain that you need them to find a home where the Seller will agree to net the maximum loan amount, but the home will appraise for the maximum suggested sales price.
When the Buyer's agent submits the Contract* to the Sellers agent, a cover letter explaining the process and how it works should be provided. The letter should also include that the Seller receives their asking price and a tax deductible Service Fee receipt for the amount of the contribution.
Once the contract is accepted, fill out the Grant Worksheet completely and submit it to HOME for processing, preferably at least 48 hours prior to Closing.
HOME will determine the eligibility of the Buyer and if approved will then fax or email you a Grant Approval Letter for your loan package and send title instructions to the title company handling the Closing. At Closing, the Seller will receive a receipt in the amount of the contribution.

*Lenders working with Investors should call the nonprofit offices for instructions pertinent to the structure of the purchase.

Forms

Here are the pertinent forms needed.

Application

Worksheet

Sample Cover Letter

Seller Commitment Letter

Links

Lender FAQ

Tax Opinion Letter

501(c)(3) Paperwork

903 S. Rifle Street,
Aurora, CO 80017

office 720.322.5480
Email: info@home-grant.org

MISSION BRANCH-HOME Grant

MISSION BRANCH is a federally recognized 501(c)(3) nonprofit organization that is committed to maximizing the potential of all people. MISSION BRANCH-HOME Grant is a "branch" of MISSION BRANCH that is committed to affordable housing. Referred to as HOME (Home Ownership and Mortgage Education), our nonprofit accomplishes this mission in two ways:

Empowering real estate industry professionals by providing education and technology that enhances the experience of their profession and their results.

Fostering home ownership by providing down payment and closing cost assistance to potential homeowners, investors, and those who are committed to creating affordable housing opportunities.