Down Payment Assistance To The Rescue! (Help MORE Buyers Buy This Winter!)

 

Resources referenced:

https://ami-lookup-tool.fanniemae.com/amilookuptool/
https://sf.freddiemac.com/articles/news/loan-limit-values-for-2024

https://docs.google.com/document/d/1qoPq0pFYqfdKKJiEEb9-nQBXS8rISxFKHNjfR5AayNM/edit

Down Payment Assistance To The Rescue! (Help MORE Buyers Buy This Winter!)

Introduction

Howdy folks! We’re going to get started real soon. We’ve had a little bit of a snafu with Jordan and I. He was having audio issues and also, we got our time zones crossed a little bit. So, you may just have to be patient until Jordan can get back to his computer and get set up. But that doesn’t mean we can’t get started in the meantime. Thank you to those of you who have hopped on in a timely fashion: Bob, Carolina, Emma, Chris, Lincoln, and Winfred. A great rising to you, Winfred!

About This Info Session

The topic for this info session is about down payment assistance and how you can utilize it to help more buyers purchase a home this winter. We’re here to provide education and information that hopefully will enable you to help more buyers. This is especially useful during a time that for many is slower, at least in colder climates like what we have here in Central PA.

Welcome and Introduction

Welcome, Jackie, Sean, and Mike! Thanks for hopping on, Mike. I’m going to promote you to panelist just so you can help if need be. Once again, for those hopping on, Jordan was having audio issues, and we also got our time zones crossed. He will be here momentarily, and we’ll dig into down payment assistance and how you can utilize it to create more conversations and get more potential clients. This information can also help people who have put their home buying hopes and dreams on hold due to recent changes in the market.

Why Down Payment Assistance is Important Now

If you missed yesterday’s Wake Up Real Estate show, Jordan was on and we were talking about this. Last year, down payment assistance was almost like robbing Peter to pay Paul because the fees were so high that it was a wash. Well, things have changed where that is no longer the case, at least in the current market conditions. It becomes a tool that is actually useful and applicable. In fact, Jordan has a client right now who, after breaking down the numbers, is purchasing a home in Kansas with just $113 out of pocket!

Explaining the Benefits

That is not the norm and not a guarantee that we can help you or your client do the same, but it illustrates what’s possible. For example, if you have a client who qualifies on paper for a 3.5% down FHA loan, and we partner them with one of the programs we have right now, like the 5% down DPA program, they can cover the down payment and have some left for closing costs. If we negotiate with the seller to help with some closing costs, we could help them buy with very little out of pocket. This can work even in a hot market if you find the right opportunities.

Finding Opportunities

Here are some strategies for finding properties that match up with this program:

  • Look for builders offering closing cost assistance or special financing.
  • Find properties listed for at least 60 days with price reductions.
  • Verify the value of the property and judge the seller’s motivation.

By doing this, you can play the role of a transaction engineer, creating transactions out of thin air by proactively finding properties and matching them with suitable programs.

Example of a Successful Scenario

Here’s an example: I got an email about a new construction home offering up to $20,000 in closing cost assistance. This property would qualify for USDA financing (100% financing), FHA financing, and has a seller offering 5% in closing cost assistance. Combining this with a 5% down DPA program, we can help a client buy with almost no out of pocket. They might have to pay for the appraisal and an earnest money deposit, but these can be reimbursed.

Adapting to Different Markets

If you’re in a market without these kinds of opportunities, look for properties that have been listed for a while and had price reductions. Verify the value and the seller’s motivation. This can help you find properties that fit the model and allow you to create curiosity and market special financing options.

Jordan’s Insights and Client Stories

Jordan joined and shared some stories about helping clients with various credit issues by looking at the problem creatively. He mentioned how in the last week, he helped clients get pre-approved and under contract despite credit limitations. He emphasized the importance of looking at financing as a puzzle and finding ways to fit the pieces together to help clients.

Understanding the Three Pillars

Jordan explained the three pillars needed to buy a house: assets, credit, and down payment. If a client has two of these, they can buy a house. He shared examples of how he boosted clients’ credit scores to help them qualify for loans that were previously denied by other lenders.

Current Market Conditions and DPA Programs

Jordan highlighted that down payment assistance programs are more affordable now due to changes in market conditions and lower interest rates. Banks are no longer charging high fees for these programs, making them more accessible and beneficial for buyers.

Structuring Deals Creatively

Jordan shared a detailed example of structuring a deal where a client ended up buying a home with only $13 out of pocket. By rolling in closing costs, negotiating seller concessions, and using a 5% down DPA program, they were able to make it work. This demonstrates the importance of working closely with your lender and real estate agent to find the most logical offer for your client.

Conclusion

There are several tangible takeaways and strategies you can use to get business in your pipeline:

  1. Make a list of clients who were active but didn’t buy in the last 6-18 months and follow up with them.
  2. Use the provided email and text scripts to reach out to your database about down payment assistance.
  3. Proactively find properties that fit the down payment assistance model and market them to create curiosity and conversations.

Q&A and Further Assistance

Jordan and Josh answered various questions from the attendees about specific scenarios and provided additional insights into down payment assistance programs. They also encouraged attendees to reach out with any specific client scenarios for personalized assistance.

Call to Action

If you have any specific client scenarios or need assistance, please reach out to Jordan or Josh. You can also scan the QR codes provided to explore the Reload program, which helps you add mortgage revenue to your real estate business. Don’t miss this opportunity to help more clients and grow your business!







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