Understand Downpayment Assistance

Step 1: Pre-qualification.
Homebuyer pre-qualifies with a lender for a loan (typically FHA-insured) that allows downpayment funds from a non-profit charitable organization.
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Step 2: Pick a Home.
Homebuyer identifies a home to purchase and enters into a contract with the seller. Seller agrees to participant in downpayment assistance (DPA) program.
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Step 3: HUD-approved appraisal.
An independent, HUD-approved appraiser conducts an appraisal on the house, the home is inspected, and walkthroughs occur.
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Step 4: Lender submits loan.
Lender submits loan documents to the underwriter for final approval. Lender requests downpayment funds from non-profit DPA organization.
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Step 5: Downpayment assistance to buyer.
Non-profit DPA organization provides downpayment funds for buyer's settlement and loan closing.
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Step 6: Settlement and closing.
Lender's underwriter approves borrower's qualifications and ensures that the home passes all inspections and appraisal guidelines. Buyer and seller go to settlement and loan closing.
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Step 7: Seller pays fee to DPA organization.
At closing, the seller makes a contribution plus pays a small processing fee to non-profit DPA organization.
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Step 8: DPA helps others.
Non-profit DPA organization uses contribution to assist more buyers.
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