Lending Process for First Time Homebuyer Mortgage Loans
Florida Down Payment Assistance Lending Process
The down payment assistance programs have different sets of Borrower / Buyer requirements and guidelines. Florida First Time Home Buyer programs can actually have several sets of guidelines depending on the Down Payment Assistance program that best fits your financial profile. The first set of "Lending guidelines" are either based on FHA loans, Conventional loans, USDA loans, VA loans, or an individual Bank's Community Reinvestment mortgage loan program.
There is also another set of individual Lenders guidelines. These guidelines / restrictions can be specific to that particular bank's "Lender Overlays.". These overlays are the restrictions that either the Bank (your Lender) or their investors place on loans. These guidelines allow the loans to be sold on the Secondary Market.
The Investors who purchase your mortgages are typically called the "Secondary Market". The Secondary Market includes the very big banks, Corporations and Foreign Countries are buyers of Mortgage Backed Securities (MBS), so are Fannie Mae, Freddie Mac and the Federal Government. Guidelines are very, very seldom waived because there's a big risk that the mortgage could not be sold to the Investors on the Secondary Market. If that happens the bank has to keep the loan in their Portfolio. That may be a problem because the Federal Regulations only allow for a bank to have a certain amount of loans versus the ratio of a bank's deposits.
Before you obtain a Pre-Qualification Letter, or better still a Pre-Approval letter, (all financial as well as credit documents have been reviewed). Please be aware that you first have to ask the Lender if they can Originate a down payment assistance loan for First Time Home Buyers. You will find that many unscroupulous loan officers will make it sound like they have down payment assistance programs. The reality is, they just want to pull your credit, so you will feel obligated to use their services even though they cannot perform to your needs. A very small percentage of Florida lenders can actually originate first time homebuyer mortgage loans.
The overwhelming majority of Lenders do not originate down payment assistance programs because their company hasn't been approved by the Sponsoring Authority.
However, they will still want to pull your credit and hope that you can get the down payment as a gift from a family member or your employer!
This is risky on your part and very unnecessary. You should get pre-approved by a Mortgage company that can legitimately originate a down payment assistance type of loan package.
The Lender who Originates the first mortgage MUST be the same Lender that Originates the Down Payment Assistance Loan or Grant. That's the only way it works! You won't find a Down Payment Assistance Lender who will do a "stand-alone" DPA loan because they will violate all the DPA Lending guidelines. The two loans / grants cannot be separated among Lenders.
If a Lender tells you to go find a DPA Loan on your own, turn around and leave their office because they don't know anything about down payment assistance.
If you have any questions or need a solid Florida First Time Home Buyer Down Payment Assistance Lender, please CONTACT US. We'll be glad to help!