Community Home Buyers Program - Version 1
As a first-time home buyer, we recommend that you get prequalified once you have determined that you satisfy all of the program requirements. PMC's prequalification service, offered at no charge or obligation, will mail you a report detailing your maximum purchasing power under the specified program. PMC is proud of its accurate prequalification service. In our history, if our client didn't purchase above our recommended maximum sales price, we have never had a client declined for the mortgage loan! Click here to go to the prequalification page.
Version # 1 - 2%/3% Down Payment Option
- This program allows only a portion (2%) of the 5% down payment to be your own money. For example, $100,000 sales price - of the required $5,000 down payment, only $2,000 would have to be your own money. For the remailning3% of the down payment, see below ( Requirements- Funds to close). This is quite generous. For most loan programs, all of the 5% down payment would need to be your own funds.
Closing Costs & Prepaids
- These expenses incurred in a purchase transaction are permitted to be paid from the following sources: gift, seller contribution (3% of the sales price - maximum), cash or the sale of a fixed asset (call our office for details), and/or a lender contribution *.
- Housing ratio = 35%: Your proposed housing payment cannot exceed 35% of your gross monthly income - most ordinary loan programs offer a maximum of only 28%, so you can in effect "buy more house."
- Debt ratio = 40%: Your proposed housing payment plus your monthly recurring debts cannot exceed 40% of your gross monthly income - most ordinary loan programs offer a maximum of only 36%, so again you can in effect "buy more house."
- Under ordinary loan programs, the lender will not approve you unless you can demonstrate that you have at least 2 mortgage payments "in reserve" after all of the down payment, closing costs, and prepaids are paid. That requirement is waived under this program.
Funds To Close
- You must have enough to afford a minimum of a 5% down payment (e.g. if you were considering, perhaps, a $100,000 house/condo/townhouse, you would need at least $5,000). Now, of that 5% down payment, 2% ($2,000 in our example) must be your (you and any co-borrowers) own funds. This money would need to be in a savings, checking or money market, account. If these funds are literally in cash ("mattress money") or if the proceeds from the sale of a fixed asset, it still may be used, but call our office for details. The other 3% may come from a gift (from immediate family members only), an unsecured loan (term of the loan cannot exceed 5 years), and/or a lender contribution *.
- For closing costs & prepaids (roughly 5% of the sales price), these expenses can be paid from a gift, seller contribution (3% of the sales price-maximum), cash or from the sale of a fixed asset (call our office for details) and/or a lender contribution*.
- Your combined gross annual income cannot exceed $60,835 (115% HUD median).
- Single family, owner-occupied residences only - no duplexes, investment properties, 2nd homes, etc.
- You must complete a first-time home buyer education course. PMC's owner, Laurence E. Ostrom (see About PMC), is a certified instructor. Not to worry, it's easy and it is something that you don't need to complete until after you're well into the purchase transaction.
Click here to view Version # 2 of the Community Home Buyers Program
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