Prospective homebuyers in high cost areas are part of a growing trend for down payment assistance (DAP) programs. High-cost areas where homebuyers who predominantly need help live in the Tri-state-area of New York, Connecticut and New Jersey, Washington, D.C., and regions of California. With years of analyses, people who are beginning their careers as a doctor and faculty professors at universities are professions who are typically given financial assistance. Some may feel they will already have perks in their profession, so why give them more advantages. The programs exists because this group of professions has the highest repayment rate for mortgage loans.
Most lenders who offer jumbo loans generally demand 20% or higher down payments from borrowers, and that can be substantial money to come up with when the home price is $750,000 or more. Fortunately, for borrowers down payment help can come in the form of advances on bonuses, lump-sum payments, or a second mortgage with highly attractive terms made by the employer.
Universities are well-known for providing assistance to their professors that take the form of yearly monetary supplements which can be used for a down payment, closing costs, or other fees.
As mentioned previously, those who have enjoyed a long standing benefit are physicians. Some loan programs have just 5% down terms up to $900,000 with certain restrictions for current residents, interns and fellows. As well there are your local city and state down payment programs for city teachers, firemen, and law enforcement.
And for home buyers who do not qualify for those programs due to profession, they can look into FHA loans as a means of securing jumbo financing in high-cost areas. Limits for an FHA loan can be as high as $729,750 in some parts and borrowers only need a 3.5% down payment, however, the FHA seems to revise its conditions every year or so once a program becomes widely popular so don't be surprised if down payment and/or mortgage insurance rise for jumbo loans.
