The following is a partial list of programs offered by Finance USA Corporation with a brief description of the key elements of each. For a complete list of the programs that we offer, please contact us at 210-900-6851.
These materials are not from HUD or FHA and were not approved by HUD or a government agency.
Traditionally, conventional mortgages require a down payment ranging from 5% to 20% of the property's purchase price. Such substantial amounts can be daunting, especially for first-time homebuyers or those without significant savings. Finance USA's 1% Down Payment Loan Program offers a compelling alternative. Eligible clients are required to contribute just 1% of the purchase price as a down payment, while an additional 2% is provided as a grant, culminating in a total down payment of 3%. This structure ensures that clients reap all the benefits associated with a 3% down payment without the burden of private mortgage insurance (PMI).
Minimal Initial Investment: By reducing the down payment requirement to 1%, the program allows clients to conserve their savings for other essential expenses, such as moving costs or home improvements.
Forgivable Grant: The additional 2% provided by Finance USA comes in the form of a forgivable grant. This means that eligible clients are not obligated to repay this amount, effectively reducing the overall cost of purchasing the home.
No Private Mortgage Insurance (PMI): One of the standout features of this program is the elimination of PMI. Typically, lenders require PMI when borrowers make a down payment of less than 20%. By waiving this requirement, Finance USA reduces the monthly financial obligations of the homeowner.
Accessibility for Low- to Moderate-Income Clients: The program is tailored to assist low- to moderate-income individuals who might be apprehensive about their ability to afford a substantial down payment. By lowering this barrier, Finance USA promotes broader access to homeownership.
Eligibility Criteria
To benefit from the 1% Down Payment Loan Program, applicants must meet specific qualifications:
Income Limitations: Applicants must have an income that is less than or equal to 80% of the area median income for the property in question.
Credit Score Requirements: A minimum FICO® score of 620 is necessary to qualify for the program.
Down Payment: Prospective homeowners are required to provide a minimum down payment of 1% of the property's purchase price.
Loan Amount Restrictions: The program caters to properties with a maximum loan amount of $350,000.
Property Specifications: Eligible properties must be single-unit, primary residences
Comparative Perspective
Several financial institutions have recognized the challenges associated with hefty down payments and have introduced similar programs:
JVM Lending: Their 1% Down Payment Loan allows eligible borrowers to contribute just 1% of the purchase price, supplemented by a 2% forgivable grant. This program is accessible to all buyers, not just first-time homeowners, and requires a minimum credit score of 620. Additionally, it offers reduced mortgage insurance premiums, further alleviating monthly expenses.
Guild Mortgage: Through their 1% Down program, borrowers can initiate their homebuying journey with a 1% down payment, complemented by a 2% down payment assistance grant from Guild. This structure effectively provides a 3% down payment, easing the financial entry into homeownership.