The lack of down payment money remains one of the major roadblocks preventing potential borrowers from owning a home. Today, conventional loans require 20 percent to as little as 3 percent down payment. To make homeownership available to more individuals, the government offers low to no downpayment mortgage programs. The USDA and the VA, for example, provides zero down payment mortgages to eligible rural and veteran borrowers, respectively. The FHA caters to low-to-moderate income borrowers with a down payment requirement of only 3.5 percent, way below the conventional down payment average.
Still, because two of these zero down payment programs are borrower-specific, non-qualified borrowers who don’t have any savings reserved for down payment are still locked out of a good mortgage option. That delays homebuying for a few more years, and possibly deny them of the historically-low mortgage rates that are available today.
This is the void that South Carolina company Movement Mortgage seeks to fill in. In an announcement made Thursday, June 1, the company says they are going to roll out a down payment assistance program that would give qualified borrowers a down payment grant of up to 3 percent of the home’s price, and a 97 percent conventional financing.
MAPping out the void
The Movement Assistance Program (MAP) provides a down payment grant with a 30-year mortgage loan. The grant is non-repayable and does not come with second loans, any liens, or promissory notes.
Aside from the grant and financing, MAP also provides job loss insurance coverage for non-self-employed borrowers for two years. This coverage will pay six months worth of mortgage payments with a maximum monthly benefit of $1,500 should you lose your job involuntarily.
So who are eligible for the program?
Any first-time homebuyer who fits MAP’s income and asset criteria will be eligible for the program.
Recent real estate data from Trulia revealed that it’s been the first time in a decade that the number of new-owner households surpassed new-renter households so the Movement Mortgage announcement came just right.
For more details on the offer, you can visit the Movement Mortgage site here.