San Diego's #1 Down Payment Assistance Program for 2021
(Please note, this video was created prior to 2021 - but, these loan amounts, and loan details below, have been updated for 2021...)
✍️ In this video I break down the ins and outs of my #1 Down Payment Assistance program in San Diego for 2021.
✍️ This is an awesome home loan program for those that make a good to great income, have a pretty decent credit score, yet need some help with their down payment and closing costs.
In this video I go over:
- The programs main details and highlights...
- 3 typical questions I get and how I answer them...
- 3 secrets you might not even be aware of....
- The cash out of pocket you will need...
- And the typical needed supporting documents when you apply...
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Here's the main points and highlights:
➡️ First things first as some people get confused - all it is - is a loan for your down payment and then you combine it with either an FHA or Conventional loan to equal 100% financing. (Since 99% of the DPA loans I do are FHA I will base this video on FHA to simplify).
➡️ This is a State program and works no matter where you live in San Diego. I know some programs are address or location specific - this one is not. It works anywhere in San Diego county, anywhere.
➡️ You do not need to be a first time home buyer - you can be a first time home buyer or owned before - it does not matter. (And by the way - a first time home buyer is defined as haven't owned a property in 3 years.)
➡️ This is for owner occupied properties - that means you need to live in it - can't be used as a second home, vacation home, investment property, or the like.
➡️ You can get up to 100% financing - that means it covers the down payment and the FHA or Conventional home loan. We can also get up to 5% of a lender rebate to help with closing costs depending on your credit score and debt to income (dti) ratios. (This constantly changes daily so when you apply, and we lock, that's when we know for sure.)
Generally speaking for this loan buyers closing costs + pre paids are around 4.5% - so, you would need around 1.5% either from the seller, yourself, or a combination of the two.
➡️ This can be an FHA or conventional loan (Keep in mind if we go FHA, and it's a town home or condo, it needs to be in an FHA approved complex - you can see those here).
I want to repeat that so it's very very clear - if you are going with a conventional loan + DPA = you can buy anything.
If you go with an FHA loan + DPA - if it's a townhome/condo - it needs to be on the FHA aprpoved list here.
➡️ You need a minimum credit score of 580 (Don't rely on Credit Karma, Credit Sesame, or the Boogie Man. When you fill out an online application, and I run credit, we use that.) This minimum credit score needed has ranged from 580 to 620.
➡️ We can go up to a $753,250 loan amount (which is about a $780,000 +/- sales price). The max loan amount has fluctuated between the conforming and max conforming loan amounts - $548,250 to $753,250.
➡️ We can go up to a 55% debt to income ratio with an FHA loan (If you add up your minimum monthly debts on your credit report + future housing payment / average gross income = debt to income ratio)
➡️ There is no max income. (That means you can make $5 million a year and still qualify. It does not matter.)
➡️ This works on a home, town home, PUD, or condo (no manufactured, mobile, 2/3/4 units.)
Here's 3 of the most common questions I get:
❓ Question 1: Is this just for "low income" people
Answer: No. As mentioned above you can have an *unlimited* amount of income - it does not matter. And, depending on what you mean by low income - for the most part you can't have a low income and buy in San Diego anyway. This is one of the largest misnomers of the program.
❓ Question 2: What zip codes can I buy in for San Diego?
Answer: Anywhere in San Diego county works. Whether you are in Fallbrook, or Chula Vista, or Pacific Beach, or Oceanside. This is *not* zip code specific.
❓ Question 3: How do I make payments every month?
Answer: You have a loan for your down payment and you make monthly payments. You have a regular FHA or Conventional home loan and you make monthly payments. So, yes, you make 2 separate payments every month.
Here's 3 secrets of this program (or mis conceptions):
➡️ Secret #1: You do *not* need to be a first time home buyer. This can be your first home. Or this can be your third home. It's not limited to just first time home buyers.
➡️ Secret #2: You do *not* need to have perfect credit. If its just yourself applying you need a 580+ middle credit score. If it's you and a co borrower - we use the lowest middle credit score and that needs to be 580+. (Please note this is always changing and has ranged from 580 to 620 *minimum* to get).
➡️ Secret #3: This doesn't take any longer *nor* require any additional paperwork than any other "regluar" home loan. Generally speaking, we can close in 30 days or less.
Here's the cash out of pocket you can expect:
➡️ Deposit - You should count on putting between 1% to 2% of your sales price - as your deposit into escrow - within 3 days of your offer being accepted. This is totally negotiable between the buyer (you) and the seller. I have helped clients with as little as $500 into escrow. But, keep in mind with the low inventory in San Diego, and lots of offers on each property, that's not a likely scenario.
Please keep in mind this is 100% refundable - if it's not used and refunded back at the close of escrow.
➡️ Home Inspection - You *should* use a licensed home inspector to check out the property to understand the kind of shape it's in. Do you HAVE to? No, just highly recommended. Depending on if it's a home or townhome/condo it will be somewhere around $250-$500 +/-.
Keep in mind - you can choose to inspection anything you want. The roof, septic, plumbing, electrical, pool, spa, foundation, etc.
➡️ Home Appraisal - You will need to get a home appraisal on the property since you are getting financing. You pay this directly to the appraiser. This has nothing to do with the buyers agent (me), the listing agent, the seller, the lender, etc. This will be around $500 +/- depending on if it's for a conventional or FHA loan.
My offer to you: If you use my services for the real estate and loan I will credit towards your closing costs at the close of escrow whatever you spent on your home inspection and appraisal as my way of saying "thank you" for utilizing my services.
Basic documentation needed from you (or you and co borrower):
✔️ Copy of your drivers license (screen shot is fine)
✔️ Copy of your social security card (screen shot is fine)
✔️ Last 30 days paychecks (you should get these from your employer via email and PDF each time you are paid).
✔️ Last 2 months bank statements - all pages (You just log into wherever you have a bank acount online and save the last 2 months via PDF.)
✔️ Last 2 years taxes and W2's - If you do not have them you can get them from the IRS website here.
✔️ Latest statements if you have anything like: 401(k), retirement, stocks, bonds, mutual funds, etc
✔️ If you are self employed we will need last 2 years taxes and W2's (if applicable) as well as year to date profit and loss sign and dated (you can do this - doesn't need to be a CPA).
✔️ We can potentially need more depending on this like: pay or collect child support, have been divorced, have had a short sale or foreclosure, have filed bankrupcty, have rental properties, etc.
Here's your steps to begin:
1) Fill out my online application at Scotts Loan App.com. If it's just you - then you fill it out just for yourself. If you are married - it's you and your spouse (regardless if they work or not, their income, their credit, etc.) If its you and a co borrower - then you both fill it out.
2) Once you are completed I will get an email it was done, and will look everything over to make sure the application is looking good and its a possibility.
3) Then, I will email you out all the documentation we will need (cough. Look above) and you will gather all of those and either upload back into your loan application portal or email to me in one email.
4) Once I have received your application completed, and all of your needed documents, I will run your credit, send your way to review, and put together your loan. All of this can be done within a few hours - just dpends on how fast you do the application and provide me the documents I need.
Here's more DPA videos and info below:
SD DPA Program Needed Documents
❓ Of course, should you ever have any questions at all, you can shoot me a text/call, email, or contact me here.
➡️ Here's that link again to apply
Your DPA Insider,
Scott
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