One of the best ways to buy a house with almost zero down is to buy a FHA owned home.  When FHA has to foreclose because borrowers are not making payments, they offer a very special program to buy their houses for $100 down and they will credit you 3% for closing costs.  

The prices on the HUD homes tend to be very good.  You will still have to qualify for a new FHA 30 year fixed loan.  Today’s rates are the best in 45 years with borrowers able to get 30 year fixed in the low 5% range.  This will help you keep your payments low.

Sandiegodownpayment.com is the leader in providing knowledge and resources regarding home financing options for San Diego County first time home buyers. This is one of many installments in our series describing all the special financing available to home buyers throughout San Diego County. So we welcome you to read on and learn about these fantastic and generous programs available to you right now!

You hear a lot of talk in the media these days about how difficult it is to get home financing to buy a home. One home loan program that has NOT changed at all is 100% financing available to active U.S. military and veterans. There has been no change in the availability of funds or guidelines for active military and veterans. The U.S. Government has the VA home loan program in place to support active military and veterans that has served the United States, and it’s not going anywhere!

Using VA home loans, a veteran or active military member can buy a home in San Diego County with very little or even no money out of their pocket. In addition to 100% financing, sellers are allowed to contribute up to 4% to pay for the VA buyers closing costs. So it is very possible to buy a home in San Diego with almost no money of pocket.

VA home loans are also very flexible with qualifications. You do not have to have perfect credit. VA will work with VA approve buyers who have had credit issues in the past and have below average credit. Additionally, VA loans are flexible with debt-to-income ratios. In this regard, VA home loans are not as restrictive as many other home loans available.

Here are some other key points regarding VA home loans:

• The house you are purchasing using a VA home loan must be your primary residence

• Only spouses are allowed as co-borrowers

• You can buy everything from manufactured homes, condos, houses and 2-4 unit properties all with zero down!

• Even if you have used your VA eligibility in the past, you can use it again as long as you have sold you previous house and paid off that VA loan

Veterans and active military members who are paying high rents should really look at using their VA eligibility to purchase a home. There are many benefits to purchasing a home vs. renting:

1. Tax benefits: When you buy a home, you are allowed to deduct your mortgage interest, and property taxes. This is by far the largest tax write-off most people will ever have. You can take these deductions up front with your HR Dept and it can mean $300-$800 more per month going to you and NOT going to pay taxes!

1. Equity build up: When you pay rent that money is getting thrown away and you will never see a return on it. When you buy a home, every month when you make the mortgage payment you are paying a little bit towards the principle to eventually own the home free and clear. We encourage home buyers pay a little bit more per month above their mortgage payment; this will allow you to pay the house off in a much faster time frame.

1. Appreciation: Over time your house will gain in value with inflation. This can allow you to have a substantial amount of equity you can use for retirement or to move up to a better house.

1. Personal satisfaction: A substantial non-monetary advantage to owing a house is the personal satisfaction of being a home owner and putting down roots in a neighborhood. Being able to make improvements to the house and make it how you want it. Also, having the peace of mind and security that one day it will be paid off and you will have a very low cost home to live in.

So as you can the VA home loan program is really a fantastic benefit to those that qualify. If you are eligible and you are renting, it is really something you should look into. With 100% financing you do not need to have a down payment and many renters can immediately begin to search.

If you are interested in learning more about qualifying for a VA home loan, please contact one of our VA loan specialists at www.sandiegodownpayment.com. We are a fully approved VA home loan specialist.

Sandiegodownpayment.com is the leader in providing knowledge and resources regarding home financing options for San Diego County first time home buyers. This is one of many installments in our series describing the little known, free, down payment assistance and grant programs available to home buyers throughout San Diego County. So we welcome you to read on and learn about these fantastic and generous programs available to you right now!

The Escondido offers 5% down payment assistance for qualified buyers looking to buy within the City of Escondido.  This program works for any home buyers who have not owned a property in the last 3 years. There are 2 outstanding aspects of this program vs. many of the other programs throughout San Diego County:

1. You DO NOT need a down payment. Escondido will give you 5% down and we will get you an FHA 1^st 30 year fixed mortgage for 95%. So you DO NOT need any money down
2. Escondido allows borrowers to make up to 120% of the median income for San Diego County to qualify. Many of the other programs require borrowers to make 80% or less of the median to qualify. So this program works for a larger number of borrowers.

Additionally, on top of the 5% from Escondido, we can arrange 3% more assistance that can be for closing costs or added to the down payment.  

The way we structure the financing for these programs for you is we first get you approved for a FHA 30 year fixed first mortgage, and then the City of Escondido provides the down payment assistance as a “silent 2nd” mortgage. There are NO payments that need to be made on the 5% down from Escondido or the 3% from the state. You do not have to pay the assistance back until you sell the property. If you never sell, you never have to pay the down payment assistance back! For Veterans we can also structure this with a VA loan 1^st mortgage.

So as you can see, using an easy to qualify for FHA or VA home loan + the 5% down payment from the City of Escondido is a fantastic way to become a home owner in San Diego County. These programs allow you to buy a house in a neighborhood you enjoy and to become a homeowner at a monthly payment similar to rent. And as a home owner, you will reap all the benefits of home ownership such as building equity and wealth, paying less taxes with the large deductions available to home owners (but not to renters) and also the personal satisfaction of owning your personal residence in a great community such as Escondido.

As mentioned above, homeowners pay substantially less income taxes then renters. As a homeowner, you are able to write off the mortgage interest + the property taxes. This is a very large deduction and you can take this up front by adjusting your tax withholdings with your HR Dept. This can result in taking $300, $400, $500 and more home per month that you were paying in tax when you were renting. So a $1,500 rent payment can be equivalent to a $1,900 or so housing payment, because when you rent you pay a lot extra in income taxes.

If you are interested in learning more about all of the hidden grants and down payment assistance programs available to home buyers in San Diego County, please contact one of our specialists at www.sandiegodownpayment.com.

Have you ever looked at a house and said to yourself; “I love the neighborhood, the floor plan and the lot but this house needs a lot of updating?” Well, now there is an easy way to purchase a house and get the funds to fix it up exactly how you want it all at the time that your buy. This is done by using a 3% down FHA renovation loan available through www.sandiegodownpayment.com.

First you search for a house that you want to purchase. This renovation loan will allow you to widen your search to include houses that need a little work. Oftentimes you can get a great deal on a house that is in a prime neighborhood that is being overlooked by other buyers because it needs some work. It may need for example new carpeting, new hardwood floors, an updated kitchen, an updated bathroom, etc… These are all fixes that you can accomplish with a renovation loan. Many times you can buy at a deeply discounted price in a great neighborhood, and you gain significant increase in value by just fixing low cost cosmetic items. This is a fantastic loan for a first time buyer who wants to get into their first home and begin to build equity.

Use your imagination when searching for homes. When looking at a home that needs work, imagine it with polished new floors, fresh new paint in the interior and exterior, brand new kitchen appliances and cabinets, brand new updated bathrooms. This will allow you to turn an ugly duckling into a beautiful swan.

Here’s how the loan works. First you want to get pre-approved with a loan specialist at sandiegodownpayment.com. This loan requires that the property be your primary residence. You will have to provide income documentation and have a steady job history over the past 2 years. You do not have to have perfect credit. Once pre-approved for the renovation loan you want to find a property that will work with the renovation loan. The best properties only need cosmetic fix-up, not major renovation work. Items such as flooring, kitchen updating, bathroom updating, painting interior and exterior and new windows are examples of cosmetic items. Examples of major renovation items that don’t work as well with the loan are; fixing foundations, moving walls, and adding additions. There is a loan for these items, but it is more complex and requires more time then the streamline renovation loan for cosmetic items.

Once you find a house that you would like to buy, you will find a contractor to give you a bid to do the work you would like to do on the house. You will need a licensed and bonded contractor. We can refer one to you. You will then forward the bid to your loan officer and they will include that with the processing of your file. Once you loan file is approved, the lender will fund the purchase price of the house + the costs to do the renovation all as one loan. The cost to fix will go into an escrow account for you to pay the contractor to complete the work. Once the work is complete, FHA will come out to approve the work and you will be finished. In some cases you will not have to make your first mortgage payment until the work is completed. Here is an example:

-purchase price $300,000

-renovation costs $30,000 (new hardwood floors, new kitchen cabinets and appliances, interior and exterior painting)

-total new loan: $321,000 (you 3% down of the $300,000 purchase price of $9,000 is subtracted in)

-seller get’s paid $300,000 at closing

-$30,000 stays in escrow to pay the contractors to fix the house

-you end up with a $321,000 new loan and a sparkling new house

There are many, many benefits to this renovation loan. Right now you can get 30 year fixed interest rates at near 40 year lows on these renovation loans. So you are financing the fix up costs at low rates and getting a tax deduction as you are allowed to deduct the mortgage interest on your primary residence. This also allows you to get into a better neighborhood by buying a house at a low costs that needs work and instantly building equity.

If you need a real estate agent that specializes in finding fixer upper houses, please ask the people at www.sandiegodownpayment.com for a referral.

We are in contact with the very best agents who know how to find these properties and work with this loan program.

If you are interested in learning more about fixer-upper loans and all of the hidden grants and down payment assistance programs available to home buyers in San Diego County, please contact one of our specialists at www.sandiegodownpayment.com.

Sandiegodownpayment.com is the leader in providing knowledge and resources regarding home financing options for San Diego County first time home buyers. This is one of many installments in our series describing the little known, free, down payment assistance and grant programs available to home buyers throughout San Diego County. So we welcome you to read on and learn about these fantastic and generous programs available to you right now!

One of the very best and little know down payment programs offered for first time home buyers in San Diego County, is the City of San Diego Housing Commission down payment assistance and grant programs.  This program works for any home buyers who have not owned a property in the last 3 years and make 80% of the San Diego County median income adjusted for family size.  Using this program, home buyers can get 25% down payment assistance, plus a $15,000 forgivable grant. And additionally on top of all that, we can arrange 3% more assistance that can be for closing costs or added to the down payment.   The following is what your payment would look like on a $300,000 home in San Diego:

· $300,000 purchase price

• $9,000 down payment from the buyer
  (3% required down from buyers own funds but can be a gift)
• $75,000 down from the City of San Diego
• $15,000 grant from the City of San Diego that is forgiven in 5 years
• $9,000 an additional 3% from a state of California program

• 1st mortgage $192,000 at 6% 30 year fixed payment $1,151/mo

So after receiving all of the down payment assistance your mortgage payment would be $1,151 per month. This is less than what many are paying for rent.

The way we structure these programs for you is we get you approved for a FHA 30 year fixed first mortgage and then the City of San Diego provides the down payment assistance as a “silent 2nd” mortgage. There are NO payments that need to be made on the 25% City of San Diego down payment assistance. You do not have to pay the assistance back until you sell the property. If you never sell, you never have to pay the down payment assistance back! The $15,000 grant that can be added on top of the 25% down does not have to be paid back AT ALL if you live in the house for 5 years. It is completely forgiven.

So as you can see, using an easy to qualify for FHA home loan + the down payment assistance and grant program from the City of San Diego is an absolutely fantastic way to become a home owner in San Diego County. These programs allow you to buy a house in a neighborhood you enjoy and to become a homeowner at a monthly payment similar to rent. And as a home owner, you will reap all the benefits of home ownership such as building equity and wealth, paying less taxes with the large deductions available to home owners (but not to renters) and also the personal satisfaction of owning your personal residence in a world class area such as San Diego.

We encourage home buyers who use these programs to make add a little bit more to their mortgage payment every month to pay off the mortgage in a shorter time frame. Think in the situation outlined above, if you were to pay your $201,000 mortgage off in 15-20 years. Since you do not have a payment on the down payment assistance from the City of San Diego, you would NOT have a mortgage payment for the rest of your life! This is achievable by adding a little more to your mortgage payment every month.

If you are interested in learning more about all of the hidden grants and down payment assistance programs available to home buyers in San Diego County, please contact one of our specialists at www.sandiegodownpayment.com.

You may have read that the FHA has banned down payment gift programs,
this does apply to the programs we use. The FHA has banned the practice
of the seller give the down payment to a non profit organization and passing it
on to the buyer as a gift.

FHA to ban down-payment gift programs (San Diego Union Tribune)
http://www.signonsandiego.com/uniontrib/20080622/news_1h22harney.html