Are you a first-time home buyer dreaming of owning your own home but worried about the hefty down payment? You’re not alone. Many prospective homeowners find the down payment to be one of the most significant barriers to homeownership. The good news is that there are programs designed specifically for individuals like you, offering the potential to purchase a home with no down payment. One such program is the 0% Down Purchase program from UWM (United Wholesale Mortgage). Let’s delve into how this program works and how it can make your homeownership dreams come true.
The UWM 0% Down Purchase Program
The UWM 0% Down Purchase program is an innovative solution that provides a 3% down payment assistance loan (up to $15,000) to qualified borrowers. The most appealing aspect is that this loan comes with no interest and no monthly payment requirement. Here’s a detailed overview of how the program operates and who qualifies for it.
Key Features of the UWM 0% Down Purchase Program
- No Down Payment: Qualified borrowers can start their journey as a first-time home buyer with no down payment.
- 3% Down Payment Assistance Loan: UWM provides a second lien mortgage for 3% of the purchase price, up to $15,000.
- No Monthly Payments or Interest: The second lien has no monthly payment requirement and no interest.
- Flexible Repayment Terms: Borrowers can choose when and how often to make payments on the second lien loan, which must be paid in full by the end of the loan term or when the first lien loan is refinanced or paid off.
Eligibility Criteria
To take advantage of the UWM 0% Down Purchase program, borrowers must meet specific eligibility requirements:
Program Overview:
Here’s how it works:
- First lien mortgage meets LTV requirements
- UWM provides a second lien mortgage for 3% of the purchase price, up to $15,000
- Second lien has no monthly payment requirement and no interest
- Second lien balance is due when the first lien loan is refinanced or paid off, whichever comes first
- Payments on the second lien can be made throughout the loan term, but are not required
How borrowers can qualify:
- Borrowers must be at or below 80% of the Area Median Income (AMI) for the address of the property they are buying and meet Home Possible® guideline requirements
- For very-low income borrowers whose qualifying income is at or below 50% AMI (VLIP borrowers), they will receive a $2,500 credit as part of the 3% assistance
- This credit does not need to be repaid by the borrower and lowers their debt obligation from the second lien
- 620+ FICO and LTV must be equal to or greater than 95% LTV, up to 97%
—OR—
- At least one borrower must be a first-time homebuyer and meet HomeOne® and UWM’s guideline requirements
- First-time homebuyer is defined as someone who has not had ownership interest in a home in the last 3 years
- 700+ FICO and LTV must be greater than 95%, up to 97%
Benefits of the 0% Down Purchase Program for the first-time home buyer
1. Lower Barrier to Entry
For many first-time home buyers, saving enough for a down payment can be challenging. The 0% Down Purchase program eliminates this barrier, making homeownership more accessible.
2. Financial Flexibility
With no monthly payments or interest on the second lien, borrowers have the flexibility to manage their finances more effectively. They can choose when to repay the second lien, offering greater financial freedom.
3. Increased Loan Approval Rates
By reducing the initial financial burden, more borrowers qualify for home loans. This can lead to higher loan approval rates and a quicker path to homeownership.
4. Build Equity Sooner
Without the need to save for a down payment, first-time home buyers can enter the housing market sooner and start building equity immediately.
How to Get Started
If you’re a first-time home buyer interested in starting your new home search, reach out to the new home experts at Local Choice Realty. They have strong mortgage connections to help guide you through the mortgage process. Additionally, Orca Home Loans, an independent mortgage broker affiliated with UWM, is available to discuss your options and start the application process.
First-time Home Buyer Steps to Apply
- Contact Local Choice Realty: Begin your home search with the guidance of experienced real estate professionals.
- Speak with the mortgage team at Orca Home Loans: Discuss your mortgage options and determine if you qualify for the 0% Down Purchase program.
- Submit Your Application: Work with Orca Home Loans to complete your application and gather all necessary documentation.
- Get Approved: Once approved, you can move forward with purchasing your new home with no down payment required.
Conclusion
The journey to homeownership doesn’t have to be daunting, especially for first-time home buyers. With programs like UWM’s 0% Down Purchase, you can overcome the down payment hurdle and make your dream of owning a home a reality. Don’t let the fear of a down payment hold you back. Explore your options today and take the first step towards homeownership.
For more information and to get started, contact Local Choice Realty and Orca Home Loans. Your dream home is just a few steps away!
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Orca Home Loans
NMLS #1904915 | Company NMLS #1393730
Licensed In: FL
MORTGAGE BROKER ONLY, NOT A MORTGAGE LENDER OR MORTGAGE CORRESPONDENT LENDER Important Disclosure | NMLS Consumer Access
Information subject to change. Certain restrictions apply. Subject to approval of borrower and investor guideline requirements. Down payment is provided as a 2nd lien against the subject property. 2nd lien bears a 0% interest rate and cannot exceed a $15,000 loan amount. 2nd lien has no minimum monthly payment requirements, a term of 360 months and is fully due as a balloon payment upon the occurrence of either a refinance of the 1st lien, payoff of the 1st lien or the final payment of the amortization schedule of the 1st lien. Borrower must qualify based on Home Possible® or HomeOne® guidelines. Some exclusions may apply.
The principal, interest, and MI payment of a $350,000 30-year Fixed-Rate Loan at 6.75% and 97% loan-to-value (LTV) is $2270.09. The Annual Percentage Rate (APR) is 6.949% with estimated finance charges of $6,500. The principal and interest payments, which will continue for 360 months until paid in full, do not include taxes and home insurance premium, which will result in a higher actual monthly payment. Rates current as of 5/20/24. Subject to borrower approval. Some exclusions may apply.
