 Buying a home is a major financial step, and coming up with a down payment is often the most challenging part. Fortunately, down payment assistance (DPA) programs make homeownership more attainable by providing funds to cover part of the down payment.
How DPA Programs Ease Your Homebuying Journey DPA programs offer financial support through grants or low- or no-interest loans, typically covering 3% to 5% of the home's purchase price. This reduces the amount you need to save upfront, making it easier to manage the initial costs of buying a home. By lowering the down payment requirement, these programs can also help to reduce your overall loan amount and monthly mortgage payments while expanding your options for homes and neighborhoods that might otherwise be out of reach. Getting Started: Eligibility and Application To qualify for DPA programs, you typically need a credit score of at least 640 and a debt-to-income ratio of 45% or less, along with meeting specific income limits. Many programs also require completion of homebuyer education courses. Eligibility requirements vary by state, with some programs tailored for specific groups such as government employees or veterans, and most targeting first-time homebuyers. For detailed information on eligibility and to apply, visit your state or local housing authority's website. Options for Higher Earners: Alternative Assistance If you have a higher income and don't qualify for standard DPA programs, other options may be available. For example, the Freddie Mac BorrowSmart Access Special Purpose Credit Program (SPCP) offers a $3,000 grant to households earning up to 140% of the area median income (AMI), with $1,500 of this grant being taxable. The availability of this program varies by region. The FirstHome+ program provides assistance in high-cost areas by waiving certain loan terms and fees for households earning up to 120% of the AMI, making expensive markets more affordable. If you or someone you know wants to buy a home but is struggling with the down payment, call me today to explore possible options.
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 On March 15, 2024, the National Association of Realtors (NAR) reached a significant settlement that will change how broker commissions work in real estate transactions. This settlement, which still needs court approval, aims to address complaints from home sellers and will take effect on August 17, 2024. Here's a breakdown of what's coming:
Written Agreements for Homebuyers One major change is the requirement for real estate agents to sign written agreements with buyers before showing any homes. The terms need to be specific and clear, such as a flat fee, a percentage, or an hourly rate, with no open-ended arrangements. Agents cannot receive more compensation than what is agreed upon and the agreement must clearly state that broker fees and commissions are negotiable. These changes are designed to ensure buyers know exactly what they're getting into, with no surprises about costs and services. Traditional Compensation for Buyers' Agents Traditionally, buyers' agents have been paid through a commission covered by the seller. When a home is sold, the seller agrees to pay a commission fee, usually split between the seller's agent and the buyer's agent. This commission is generally a percentage of the home's sale price and is included in the total closing costs. The amount is listed on the multiple listing service (MLS), allowing buyers' agents to know the compensation they will receive. This system has been criticized for potentially leading agents to prioritize properties with higher commissions over those that best fit their clients' needs. New Rules About How Compensation Offers Are Shared Compensation offers can no longer be listed on MLS platforms. However, sellers can offer compensation off an MLS through negotiation with real estate professionals. They can still offer concessions, such as covering closing costs, on an MLS. Implications for Home Buyers and Sellers Buyers will need to sign a written agreement with their agents before touring homes, detailing services and compensation, but this is not required for casual interactions like open houses. Sellers will no longer be required to pay the buyer's agent commission on MLS systems, potentially shifting this cost to buyers. Since most homebuyers will still need a real estate agent to help them purchase a home, sellers should explore alternative ways to compensate buyers' agents, including direct negotiations. Navigating the Changes The only thing constant is change—these new rules for written agreements and compensation offers will cause adjustments for buyers and sellers. As a professional real estate agent, you can trust that I'll keep you informed and prepared for these changes to ensure a smooth buying or selling experience. |
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December 2024
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Marybeth Rojas - Broker
1350 Old Bayshore Hwy. Suite 520
Burlingame, CA 94010
Telephone (650)796-5565
www.marybethrojas.com
www.avantproperties.us
DRE#01352623
1350 Old Bayshore Hwy. Suite 520
Burlingame, CA 94010
Telephone (650)796-5565
www.marybethrojas.com
www.avantproperties.us
DRE#01352623