Zero Down Purchase Program: A Game Changer for Home Buyers

A zero-down purchase program for first-time home buyers was once thought to increase the risk of losing the home if a financial emergency occurred. However, based on the performance of the VA loan, this does not hold true.

Today, we have some exciting news for all home buyers and real estate professionals. If you’re looking for ways to qualify more borrowers and help them get into a new home with no down payment, you’ll want to hear about UWM’s exclusive Zero Down Purchase Program. Let’s dive into the details.

The Importance of Down Payment Assistance Programs

Down payment assistance programs are a game-changer for home buyers across the country. These programs make home ownership more accessible by providing the financial support needed for the down payment. UWM is offering something even better: their exclusive 0% Down Purchase Program.

How Does the Zero Down Purchase Program Work?

This program is straightforward. The borrower needs to meet the loan-to-value (LTV) requirements with their first-lien mortgage. UWM will provide a second-lien mortgage covering 3% of the purchase price, up to $115,000. The second-lien mortgage has no mortgage payment requirements and no interest.

The balance of the second lien is due when the first lien is refinanced or paid off, whichever happens first. While payments on the second lien can be made during the term, they are not required.

Zero Down Purchase Program Qualification Criteria

There are two main ways to qualify for this fantastic program:

Income-Based Qualification

1. Income Requirement: Borrowers must have an income at or below 80% of the area median income for the property’s address.
2. Home Possible Guidelines: They need to meet Home Possible guideline requirements.
3. Additional Benefits for Very Low-Income Borrowers: For borrowers with qualifying income at or below 50% of the area median income, there is a $2,500 credit as part of the 3% assistance. This credit doesn’t need to be repaid and helps reduce their debt obligation from the second lien.
4. FICO Score: Borrowers must have a FICO score of 620 or higher.
5. Loan-to-Value Ratio: The LTV must be equal to or greater than 95%, up to 97%.

First-Time Home Buyer Qualification

1. First-Time Home Buyer Status: At least one borrower must be a first-time home buyer, meaning they haven’t had any ownership interest in a home in the last three years.
2. Guideline Requirements: They need to meet HomeOne and UWM’s guideline requirements.
3. FICO Score: Borrowers must have a FICO score of 700 or higher.
4. Loan-to-Value Ratio: The LTV must be greater than 95%, up to 97%.

Important Considerations

• The information provided is subject to change, and certain restrictions will apply.
• The down payment is provided as a second lien against the subject property.
• This second lien has a 0% interest rate, and the amount cannot exceed $115,000.
• There are no minimum monthly mortgage payment requirements.
• The term of this second lien is 360 months and is fully due as a balloon payment when the first lien is refinanced, paid off, or at the final payment of the first lien’s amortization schedule.
• Borrowers must qualify based on Home Possible or HomeOne guidelines, and some exclusions may apply.

Conclusion

If you’re a home buyer looking to get into a new home with no down payment, or a real estate professional wanting to help more clients achieve their home ownership dreams, UWM’s Zero Down Purchase Program could be the perfect solution. For more details and to see if you qualify, reach out to my team today.