NC Home Advantage Mortgage Program

So you’re ready to purchase a home, but don’t have enough money for a down payment. The NC Home Advantage Mortgage program could give you the funds you need to cover most of the required down payment. The NC Home Advantage Mortgage program offered by the NCHFA, provides financial assistance to home buyers in Charlotte and other areas in North Carolina who need help with their down payment and closing costs. Unlike other programs, the NC Home Advantage Mortgage is not limited to neighborhoods or city limits; it can be used statewide.

How much financial assistance can you expect to receive from the NC Home Advantage Mortgage program?

Qualified home buyers can receive up to 5% of the loan amount they qualify for in financial assistance. Those funds can be applied towards the down payment and closing costs associated with the purchase of a home.The program must be used in combination with a FHA loan or conventional loan. A FHA loan requires a 3.5% down payment or 96.5% loan to value (LTV). So for example, if the price of the home you want to purchase is $150,000 and you qualify to finance the purchase with a FHA loan combined with the NC Home Advantage Mortgage program, you could qualify to receive up to $7,237 in assistance:

$150,000 x 96.5%= $144,750; $144,750 x 5%= $7,237

The required down payment to finance that home with a FHA loan would be $150,000 x 3.5%= $5,250. Therefore the assistance would cover all your down payment requirement.

Free money to help you own a home

NCHFA only requires repayment for the down payment assistance if you sell, refinance or transfer the home before year 15 of the loan. With the Home Advantage Mortgage program, the down payment assistance is forgiven at a rate of 20% per year after you have lived in the home for 10 years, and fully forgiven after 15 years. So essentially, if you stay in the home you purchased with the help of the NC Home Advantage Mortgage program, the 5% you received in assistance is FREE money!

Benefits of the Home Advantage Mortgage program

The Home Advantage Mortgage program has many advantages over other down payment assistance programs available in the Charlotte area. Selecting the down payment assistance program that best fits your real estate and financial needs can be overwhelming. A solid understanding of those programs is key to make them work to your advantage. You shouldn’t solely rely on your lender to guide you through the process and should hire the assistance of a Realtor® to help you. The Realtors® at Cornerstone Realty Carolinas have extensive experience working with first time home buyers and move up buyers, as well as with down payment assistance programs. Our experience will help you avoid common and not so common pitfalls non-experienced home buyers and agents make when using down payment assistance programs.

Some of the major advantages of the FHA Home Advantage Mortgage program include:

• Works with FHA loans which offer more flexible qualifying terms that conventional lending
• Generous DTI (debt to income ratio) that allows home buyers to borrow more than other programs. The maximum allowable DTI is 41%.
• Can be used anywhere in North Carolina. Most down payment assistance programs are limited to either certain neighborhoods, location, city limits or number of homes that qualify. With the NC Home Advantage Mortgage program, thousands of homes currently for sale qualify.

Eligibility for the NC Home Advantage Mortgage

In order to qualify for the NC Home Advantage Mortgage program, home buyers and the property to be financed must meet certain requirements and guidelines. Below are the main requirements:

• You must be buying a new or existing home in North Carolina
• You are a first-time or move-up buyer
• You occupy the property within 60 days of purchasing it
• Your annual gross income does not exceed $87,500
• You are applying for a government insured loan like FHA, USDA or VA loan through a Participating Lender, or a conventional loan, and meet the sales price limits of the loan type. That limit for Mecklenburg and surround counties is $271,050 for a single residence with FHA financing
• You are a legal resident of the United States
• Your credit score is 640 or higher (660 score for manufactured homes).

What Properties Are Eligible?

• New and previously owned single family homes
• Townhouses
• Condominiums
• Duplexes
• Manufactured Homes (new, never occupied