Down Payment Gift Foundation Grants

Down payment assistance programs help thousands of home buyers annually achieve their goal of homeownership. These programs provide gift funds to qualified home buyers (not just first time home buyers) to purchase a home using an eligible home mortgage program such as the FHA loan. The funds can be used for down payment, closing costs and pre-paid items. The amount of the gift varies from program to program but can be up to 6% of the home purchase price.

Gift funds can be used to purchase a home anywhere in the United States and typically have no income or geographical restrictions. Down payment gift foundations are not based on credit reports or credit scores because credit evaluation is performed by the mortgage lender. The home can be single family, two family, three or four family. Down payment gift funds never need to repaid by the home buyer. As a condition for the down payment gift foundation to make a home buyer grant, however, the seller or homebuilder must agree to make a like gift to the down apyment gift foundation at closing. In addition, the seller, homebuilder or mortgage lender pays a nominal processing fee to the down payment gift foundation (generally, 1% of the home purchase price).

How Does it Work?

Down payment gift funds are requested by the mortgage lender on behalf of a qualified home buyer. The closing agent (closing attorney, escrow officer, title company etc.) registers with the down payment gift foundation. At closing, funds are wired from the down payment gift foundation to the closing agent in the amount of the gift. Also at closing, the seller or home builder wires a like gift to the down payment gift foundation plus the administration fee.

Down payment gift foundation grants play an important role in NJ mortgage finance, NY mortgage finance and PA mortgage finance. Select Get Pre-Approved above to find out whether a down payment gift foundation may be the answer for you. The following table provides contact information for several of the better know down payment gift foundations: