Many homebuyers don’t have an issue getting the financing to buy a home; they have trouble coming up with the funds for the closing costs and down payment. That’s where the Denver Metro Mortgage Assistance Plus Down Payment Program comes into play for residents of Denver. This program helps potential homebuyers close the deal by helping with funds for the down payment and closing costs.
How the Metro Mortgage Assistance Plus Down Payment Program Works
The Metro Mortgage Assistance Program provides homebuyers with a 4% grant. This means they can receive up to 4% of their loan amount in financial assistance to help them with the down payment or closing costs on a loan.
You receive up to 4% of the eligible loan amount, which you can determine by taking the purchase price and subtracting 3.5% for the down payment. You can then add the 1.75% upfront mortgage insurance fee to the loan amount. For example:
You sign a contract for a $250,000 home. Take $8,750 off for the down payment that gives you a $241,250 loan amount. Add to that the 1.75% upfront mortgage insurance fee, which is $4,221. This gives you a total loan amount of $245,471. You can then receive 4% of that or $9,818 as a grant. That $9,818 can cover the $8,750 down payment plus some of the closing costs.
How You Qualify for the Metro Mortgage Assistance Plus Program
You can apply for the MMAP program by choosing an eligible MMAP lender. Make sure that you do your research to find a lender that is not only approved to utilize the program, but that understands it well. You want the process to go off without a hitch.
Personally, you’ll need the following to qualify:
- 640 credit score
- Maximum 45% debt ratio
- Ability to secure FHA financing
- Have maximum income of $125,860
- Complete HUD-approved homebuyer education
You can use the program to purchase a single-family home as well as a condominium, townhome or duplex. The property must be your primary residence and it must be within the specified areas of Denver, Colorado.
Do You Pay the Grant Back?
Here’s the best news – you don’t have to pay the 4% down payment money back. It’s a grant that helps you purchase a home. You don’t even have to be a first-time homebuyer in order to use the program. You just have to meet the guidelines above.
The Denver Metro Mortgage Assistance Plus Down Payment Program is a great way to help you get into a home if you don’t have the money for a down payment. The grant will help you pay for the down payment as well as a small portion of your closing costs. As is the case with any loan, make sure that you shop around to find the best rates and fees for the loan in order to maximize your investment in your new home.