One Percent Down-payment
Short on Cash???
Guild Mortgage has a lending program that will allow you to purchase with only 1% of your funds as a Down-payment!
This allows you to make a purchase without depleting all your cash reserves that may be needed for closing costs (which our firm may help you with also by providing a 1% Cash Back at closing www.LowestHomeSaleCosts.com ), or property improvements, or just financial security reasons.
Contact us for details and a Free Consultation Today!
- Guild down payment assistance is a 2% Grant based on the sales price or value (whichever is lower)
- Loan Amounts up to $424,100 (higher loan amounts available in AK & HI) • High Balance is not eligible
- 25% MI Coverage (All MI Options are available)
- 100% Area Median Income Limits (no limits for properties in low-income census tracts)
- Minimum 1% contribution from Borrower’s own funds (no gifts)
- MCC’s are allowed • Serviced Retained Product
Non-Borrower Household Income
- An Extended-Income Household is defined as households in which a member other than the mortgage holder has an income equal to at least 30 percent of that of the borrower(s) qualifying income.
- An accessory unit is a separate dwelling (as identified by the appraisal) with a kitchen and bathroom.
- Income generated from an accessory unit can be considered as rental income. • FNMA Single-family Comparable Rent Schedule – Form 1007 or existing lease is required to document the income that can be generated.
- Up to 30% of the qualifying income can come from boarder income.
- The borrower must provide documentation for at least 9 of the most recent 12 months (averaged over 12 months) and documentation of shared residency for the past 12 months.
Scenario #1: Non-Borrower Household Income A married woman, with her husband and children, are looking to purchase a larger home. The husband has monthly income, but will not be going on the loan. The husband’s income is not considered as qualifying income; therefore, there is no change to the borrower’s DTI ratio of 47%. The existence of the husband’s income, however, is considered the compensating factor that allows the borrower to have a DTI ratio greater than 45% up to 50%.
Scenario #2: Accessory Unit Income A couple is purchasing a 1-unit property that has a separate apartment built over the garage, which includes a functioning kitchen and bathroom. The current owners have a tenant who has already executed a lease agreement to rent the property after purchase. The lease agreement indicates that the rent for the property will be $550. The rental income that can be considered for qualifying purposes is $412.50 (75% to account for the vacancy).
Scenario #3: Boarder Income A single man plans to purchase a new home. He has had a roommate sharing living quarters with him for the past 12-months, and the roommate plans to live in the newly purchased home. The roommate pays $375 per month in rent. The borrower has provided documentation to validate the 12-months of prior shared residency. He has canceled checks to document the payment of $375 form the roommate for 10 of the most recent 12-months. The boarder income that can be considered for qualifying purposes is $375 multiplied by 10-months received = $3750. Because the borrower is unable to document a full 12-month history, this amount is divided over 12-months ($3750/12-months). The total monthly boarder income that can be considered is $312.50 per month.
Frequently Asked Questions
- Where is the 2% Grant coming from and is it repayable? Answer: This 2% Grant is fully forgivable, and the funds come from Guild in the form of a gift. The Grant Letter will print with the Upfront Disclosures.
- Is Guild using premium pricing to fund the grant? Answer: No, Guild is subsidizing the cost of the down payment and will not be increasing the borrower’s interest rate to fund the cost of the down payment. This will provide a more affordable and competitive rate for our borrowers.
- Can the borrower use a gift for the 1% contribution? Answer: No, the borrower must contribute 1% of their own funds.
- Can a seller give a credit to cover closing cost? Answer: Yes, however, the borrower must still make a 1% contribution from their own funds. The max seller contribution is 3% of the sales price.
- Can a loan be priced with lender rebate to cover the borrower’s closing costs? Answer: Yes, a lender credit can be used to cover a borrower’s closing costs.
- Which MI companies are available? Answer: Arch, Essent, Genworth, MGIC, National, Radian
- When utilizing income from a Non-Borrower that will be living in the home with the borrowers, what percentage of the income can be used as qualifying income? Does the income get included in the maximum Area Median Income (AMI) calculations? Answer: None of the non-borrower’s income can be used as qualifying income. However, it is considered a compensating factor in DU to support a DTI greater than 45%, up to 50%. The requirement for using this income is that it must be at least 30% or more of the borrower’s qualifying income. This income is not used as part of the income eligibility for AMI limits.
- Is there Job Loss Insurance available? Answer: Yes, it is available exclusively through Radian for borrowers who are not self-employed. The benefit provides coverage for up to 2 years from the loan closing date. It covers up to six monthly mortgage payments in the event of involuntary job loss at maximum monthly benefit of $1,500 ($9,000 total benefit over coverage period). There is no cost for this benefit and eligible borrowers must visit http://www.mortgageassure.com to register for this program.
- What is an Accessory Dwelling Unit? Answer: An accessory unit is typically an additional living area independent of the primary dwelling unit. It includes a fully functioning kitchen and bathroom. The appraisal defines the property is defined as a one-unit. There is only one accessory unit on the property. The appraisal report demonstrates that the improvements are typical for the market. Examples may include a living area over a garage and basement units.
- Is there is an expiration date for this program? Answer: Yes, loan must close by December 1, 2017.
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