Down Payment Options to Buy a Home in Salem Oregon

The real estate market has changed. Not long ago, buyers could walk away from the closing table with a home and little to no out-of-pocket expenses. We had access to zero down loans and many times, sellers were willing to pay for closing costs for a buyer or the buyer could simply roll them into the mortgage. Buyers did not have to be disciplined and save money to make an investment in their home. The buyers that did have money chose to keep it to fix up their new home or other moving expenses.

In the ‘90’s buyers were expected to come in with money to buy a home; at least 3% for an FHA, 5% or 10% conventional, and zero down programs were not yet in vogue. I bought my first home in 1985 on an FHA program. I had to save 3% and come up with my own closing costs.

Today, buyers are once again expected to contribute and have some money for closing. An FHA loan in combination with the Ameri-dream down payment assistance program, sellers are able to contribute to a buyer’s down payment and closing costs. The buyer still needs to have enough money for the Earnest Money, the inspection and in some cases the appraisal fee. The earnest money is negotiable, but the inspection fee and the appraisal fee can add up to approximately $1000.00.

Many buyer’s who are qualified to buy a home but do not have cash on hand can look at these options for their down payment.

Did you know many cities have buyer assistance loan programs? The City of Salem or Keizer has one available and buyer’s can get up to $14,000 for down payment, closing costs and loan fees. This loan is given at 3% simple interest and is due upon the future sale of the house or transfer of the title. The sales price and appraised value must be under $225, 150. The home must be located in city limits, be in decent, safe and sanitary condition and meet a local code inspection. Other conditions include:

Eligible Buyers

• Annual household gross income cannot exceed 89% of the median income for Salem
• Debt ratio needs to be less than 30% of household income
• First Time home buyer as defined by the Department of Housing and Urban development
• Contribute a minimum of $500.00 toward the purchase of the home
• Provide certification of completion of a City of Salem approved educational home buying class at the time of application
• Obtain approval from a primary lending institution for the purchase of the home
• Demonstrate the financial means to repay the loan
• Buyer must occupy the home

Eligible homes

• Qualifying structures include: Single family homes, condos or manufactured home place on a permanent foundation
• If the home is built prior to 1978, it must pass a lead based paint assessment by city staff
• The home must have a clean pest and dry rot inspection report

Have you considered other down payment options?

• Save your tax refund check
• Withdraw funds from your 401K
• Take a loan from your 401K
• Liquidate an asset such as a boat, motorcycle, collectibles, etc
• Get a gift from your parents, grandparents or other relative
• Set up an automatic savings plan for what you expect to pay for a mortgage

Give me a call if you would like more information about Salem area real estate