Mortgage

AFR announces homebuyer program to grant 2% of purchase price, 6% of closing costs

Geared to help teachers, military, first responders

American Financial Resources announced its new down payment assistance program that will provide grants for homebuyers, and caters especially to teachers, military members and first responders.

The company announced that The Advantage Program, or TAP, will minimize closing costs through its grant programs for certain qualified buyers. It will grant up to 2% of the purchase price and up to 6% of closing costs.

The program is a completely forgivable grant, and there are no resale or borrower repayment restrictions. There are, however, several requirements for homebuyers to qualify for the down payment assistance program.

Borrowers whose income is equal to or less than 140% of the median area income qualify for the program, as well as first-time homebuyers.

Also, any borrower on the loan application also qualifies is they are a current, retired, volunteer or non-paid:

  • First-responder such as a police officer, firefighter, public safety officer, paramedic, emergency medical technician, volunteers or similar
  • Educator
  • Medical personnel such as a nurse, doctor, phlebotomists, health ambassador, hospital, American Red Cross worker or similar
  • Civil servant in a federal, state or local municipality
  • Military personnel

Borrowers will not be required to apply for the program separately, and will be automatically qualified by AFR during underwriting.

The grant is available for Standard Agency, FHA and VA home lending products. In the state of Wisconsin, the appraisal cost is also waived.

This announcement comes at a time when other lenders are ending some of their lower down payment and grant programs.

Back in July last year, Freddie Mac announced it was ending lenders’ 1% down mortgage program, as many lenders were simply pricing the remaining 2% into the price of the loan, rather than giving the money to homebuyers as a grant. Lenders would then originate their buyer’s mortgage using Freddie Mac’s 3% down mortgage program.

At this point, many lenders, including Quicken Loans, were forced to discontinue their programs.

Other lenders, such as United Wholesale Mortgage, were able to keep using their 1% down program since it offered buyers a true grant that was not priced back into the loan.

However earlier this week, UWM also announced it is shutting down its program due to the costs to run it, saying it was losing money on every loan.

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