Lack of down payment is the biggest obstacle to home ownership in the U.S. So, we strive to provide excellent mortgage products which help our buyers that have little to no down payment. Sure, USDA and VA loans offer 100% financing. But, what if you don’t have funds for closing costs? What if 100% financing isn’t available to you? That’s where one of our Down Payment Assistance (DPA) programs may help. Our most popular DPA program is offered through the NC Housing Finance Agency’s Home Advantage Mortgage.
NCHFA promotes affordable home ownership to North Carolina residents. The DPA portion of the transaction is a zero interest, no payment required loan that helps buyers overcome lack of down payment. In addition, the loan is fully forgiven after 15 years (forgiven 20% per year in years 11 – 15). Repayment of the DPA is due and payable only when the house is sold, refinanced, or the note is defaulted. Note: We must close both the first mortgage and DPA. We cannot offer DPA with another lender’s first mortgage.
See the new maximum debt to income ratio requirement for all DPA and non-DPA programs further in this article!
In order to receive a down payment assistance loan, it must be coupled with a first mortgage. The program offers funds in the amount of either 3% or 5% of the first mortgage amount. We also offer the $8000 DPA through NCHFA along with Chenoa DPA and Federal Home Loan Bank of Atlanta DPA up to $10,000.
The NC Housing Finance Agency’s first mortgage may be a VA, USDA, FHA, or Conventional loan. The assistance is a second mortgage which helps cover down payment and/or closing costs. Multiply the 3% or 5% times the total first mortgage amount in order to calculate the DPA amount.
Example: Total 1st mortgage loan amount (including any funding fee) * .03 or .05 = DPA loan amount
$157,102 * .03 = $4713 DPA Amount
Foremost, any buyer using this program must meet the specific mortgage guidelines of the first mortgage. Next, there are extra Home Advantage DPA rules. Contrary to belief, DPA is available to both first time or subsequent buyers. So, it is not just a first time buyer program. Although, DPA is only available for purchasing a primary residence. Next, the borrower maximum income limit is $89,500 per year. Additionally, the debt to income ratio may not exceed 43%
Furthermore, this NCHFA DPA has not sales price limit of than any requirements of the first mortgage. Finally, the minimum credit score is 640. There are no exceptions allowed.
Since USDA is a no money down purchase loan, the down payment assistance could help pay closing costs. Thus, the Home Advantage DPA allows buyers to borrow 3% or 5% of the first mortgage amount. Therefore, this could be helpful where the seller will not pay all costs or the property doesn’t appraise higher than the price.
What if you need a no money down program but you are not a Veteran or the property isn’t USDA eligible? We see cases like this in larger cities which are not USDA eligible like Wilmington, Fayetteville, Charlotte, & Raleigh. So, a great solution is to couple an FHA loan with down payment assistance. Buyers which do not have the normal 3.5% FHA down payment are able bridge the gap between the sales price and first mortgage. If using an FHA first mortgage, the DPA could be 3% or 5% of the first mortgage.
VA loans will finance 100% of the purchase price, but on occasion the seller won’t pay any or all of the closing costs. In this case, DPA funds can pay for the closing costs. In this case, the Home Advantage DPA product lends 3 – 5% of the first mortgage when using VA loans
Conventional loans allow for buyers to finance up to 97% of the purchase price. Then, the interest free DPA can almost cover the full down payment. Remember that the assistance is 3% of the first mortgage amount and not the purchase price. Using a conventional loan with DPA has several advantages.
NC Housing also offers a great tax credit for buyers. Unlike the DPA product, this product is for first time buyers (check out exceptions to the first time buyer rule). This tax credit provides up to $2000 per year to qualifying buyers! When buyers choose the MCC tax credit, the MCC Income Limits are lower than the DPA limit.How a Mortgage Credit Certificate Gives an Annual Homeowner Tax Credit
Team Move are purchase loan experts. In a time where many focus on refinancing, 90% of our business is purchase mortgages. Furthermore, I am approved and certified with the NC Housing Finance Agency’s products. We will expertly explain your options to see if this product is the right one for your goals and situation. So with this mortgage product, a home buyer can finance from about 100% of the price to even over the amount!
Russell is a true professional who truly enjoys helping other people. Russell and his team will go above and beyond to take care of your mortgage needs whether you are building, buying or refinancing. If you are looking for mortgage options I am confident that you will find that Russell and his team are the best in the business offering you good sound advice and the expertise to help you through the mortgage process.
July 21, 2019
Russell was an huge asset to my husband and I when we purchased our home! He made the process incredibly seamless.Everything went off without a hitch on his end. My parents recommended him to us, and we hope to use him again for a future home purchase.
July 19, 2019
Russell helped me finance the purchase of my first home, and after working with him, I would recommend him to anyone. The property I had been renting was being foreclosed on, and I was given almost no notice to vacate, so I needed to find something quickly. Russell and his team were extremely attentive and diligent throughout my search, reviewing each property I considered and giving me estimates on what my monthly payments would be for each, which helped me greatly to facilitate a quick decision. Russell was a Superhero when it came to exploring different financing options, and finding something that would not only work for me, but with a better interest rate than I expect I would have gotten elsewhere. He always seemed to be available when I needed him, and he was always on top of everything throughout the entire process. I sincerely hope I do not need another mortgage anytime soon, but if I do, I know for sure who I will be going to! Thank You for Everything, Russell!
July 21, 2019
I had the pleasure of working with Russell and Amy on a transaction that I thought was “dead in the water”. Their team had actually been recommended by another agent who had used their services and thought they might be able to assist my buyer and me. To my surprise, they were able to provide the kind of assistance that resulted in a successful closed transaction. Russell and his team were always professional and responsive to our every request and need. There was never a time when we called that they did not respond immediately. My client and I were thrilled that they were able to get us closed when we both thought that all hope was lost. Today, my buyer is the proud owner of her first home, due in no small part to the hard work, knowledge, and dedication of this team. I am more than satisfied with the outstanding service that I and my client received, and will not hesitate to refer them to other clients, or use them whenever I can.
Pat Heath, REALTOR ®
July 21, 2019
Russell has always been someone you can trust in the mortgage industry. He goes above and beyond for his clients, while also continuing to perform his work with integrity. His teams have always produced great results and are very good to work with.
July 21, 2019
Russell is a dedicated mortgage professional with a high level of integrity who, since 2010, has assisted several of my buyers with obtaining a mortgage. In addition to having an outstanding knowledge of the business, Russell is honest, trustworthy, realistic about what it takes to get a loan closed and does it in a timely manner. I highly recommend him for anyone in the market for a mortgage or refinance of their home.
Linda Mehner, REALTOR®
June 19, 2020
It has been such a pleasure working with Russell Smith. He is knowledgeable, professional, prompt and goes out of his way to handle any issues that arise. Buying a home is very stressful, he and his team took so much stress off of me during the entire process. Amy, who is the main point of contact, is a huge asset to the company, she helped me so much as well. I highly recommend them for all of your lending needs.
September 30, 2019
My husband and I were recommended to Russell Smith, by our daughter and son in law. They had talked about what a good experience they had with Russell and Blue Ridge Bank, when they bought their home. We were very pleased with how everything was handled in a professional way. Russell was very helpful. We would certainly recommend Russell and Blue Ridge bank to others who may be buying a home or refinancing their present home mortgage.
September 30, 2019
I just wanted to say THANK YOU TO EVERYONE at Blue Ridge Bank Mortgage. I have never worked with a lender that has made a closing happen this fast and not to mention without any confusion. You kept everyone on the same page. You all are FANTASTIC!! I wish I could work with you on every closing.
October 2, 2019
We could not have been more delighted and pleased to have Russell Smith and his team handle our recent home financing. From start to finish the process was fast, efficient and stressless. Our loan was fully approved well in advance of our closing date, and we look forward to having Russell help us with any future mortgage needs. Highly recommend Russell Smith and his team at Blue Ridge Bank!
October 2, 2019
Russell Smith and Amy Kurtyka are simply the best in the business. They completely saved us from disaster during our home purchase. My wife and I had been working for almost 2 months with another bank on a mortgage. 1 week before closing, despite meeting all conditions, the bank denied the loan. We were crushed and desperate. With us WAY too far along in the process to start the home search again, and with an anxious seller, there was only one person recommended to us: Russell Smith. They told us if anyone could pull it off it was Russell (and Amy). And they did it. IN 6 DAYS (start to finish) we were approved and were able to close on the original close date. No one can believe it, and neither can we. Russell and Amy worked well into the night every one of those 6 days and pulled off the impossible. Now we have our dream house. We will forever be in their debt'…'so to speak. I will never work with another bank. Blue Ridge Bank should be the first and last place you look to meet your lending needs. Don'’'t waste your time, go with the best.
October 9, 2019