The Reality of Real Estate with Chris and Bri
Brianna Lehman, the Realtor, and Christopher Lynch, the Lender, give a real take on making home ownership attainable. They break down real-life scenarios, trends in the market and give their personal tools to make homeownership not just your dream but your reality.
The Reality of Real Estate with Chris and Bri
Pathways to Homeownership: A Deep Dive into Down Payment Assistance and Home Buying Programs
Imagine unlocking the door to your very first home, the pride swelling within you, knowing you've navigated the financial maze to make it happen. That's the journey I, Christopher Lynch and Brianna Lehmann guide you through in our latest episode. We delve into the plethora of down payment assistance options that can transform the dream of homeownership into a reality, especially for first-time buyers. From the allure of minimal down payments on conventional loans to the particularities of USDA loans taking into account the income of the entire household, we ensure you're equipped with knowledge to pick the path that suits you best.
Step by step, we walk you through home buying programs you might not know about in the Canton and Massillon areas, where your income could be the golden ticket to additional support. But it's not all about the funds—your personal finances need to be in check too. We discuss the importance of having a safety net and planning for those pesky additional expenses that come with buying a home. Whether it's missing appliances or future repairs, we prepare you for the full picture of homeownership costs, beyond just the mortgage.
As we close this episode, we extend our warmest thanks and remind you that our podcast is more than just transactional advice—it's about celebrating your personal victories in the real estate game. Your participation fuels our passion and makes this podcast possible, so drop us a line on Instagram or shoot us an email. Remember, tapping into grants and assistance programs is not a sign of weakness, but a strategic move towards independence and security. Stay connected, informed, and, most importantly, confident on your journey to homeownership with the Reality of Real Estate podcast.
YouTube: https://www.youtube.com/@LucasLiveMedia
Instagram: https://www.instagram.com/realityofrealestatepodcast/
Email: Brianna Lehman- blehmanrealtor@gmail.com
Email: Christopher Lynch- Christopher.Lynch@ccm.com
Hey everyone, what's going on? Welcome to the Reality of Real Estate podcast. I am one of your hosts, Christopher Lynch, and welcome my co-host.
Speaker 2:Hey everybody, my name is Brianna Lehmann.
Speaker 1:We give you a real take on making home ownership attainable.
Speaker 2:We will be breaking down real life scenarios, trends in the current market and giving you our personal tools to make home ownership not just your dream, but your reality.
Speaker 1:Get ready to be inspired, motivated and ready to take action towards building your own empire.
Speaker 2:Because when you invest in real estate, you aren't just purchasing a home, you're investing in your future.
Speaker 1:Ready set go, hi guys.
Speaker 2:Ready, we're here again.
Speaker 1:Yes, we're back, we're back. So in this episode we kind of just want to talk to you guys about different down payment assistance options, and I always get the question of, hey, like I want a first time home buyer loan, well, that can be a lot of different things.
Speaker 2:Yeah, and they've changed all the time.
Speaker 1:Yes, and so just to kind of break things down, so, as a first time home buyer, the biggest perk of being a first time home buyer, in my opinion, is that if you are a conventional buyer, your minimum down payment is going to be 3% of your agreed purchase price. So that is just right off the rip. That is your perk as a first time home buyer. Conventionally, fha, the down payment, whether it's your first time buying, second, third, fourth, fifth, if you're an FHA buyer, it's always going to be 3.5%, unless they change that requirement. Usda, it's always going to be no down payment. You just have closing costs and you need to make sure that you fit into their income limits based upon your household size, and that is a good thing to mention for USDA. Usda actually goes off of your household income, not whoever is on the loan. So if you are, you know we'll just say here husband, wife, two teenagers, everyone works, it goes off of everybody, everyone's income is being taken into consideration.
Speaker 1:Not to approve you, but it's only going to go off of whoever is on the loan. So if that's just mom and dad, then mom and dad's income is going to be taken into consideration. But if both teenagers work part time and they've been doing it consistently, that income is taken into consideration.
Speaker 2:What if you're not married?
Speaker 1:Same way. All of it's taken into consideration, whoever is in the house, yep, so you fill out a occupancy letter and who's going to live in the property with you. So you complete that and then it'll ask you if they work and ask you what their income is, and then we'll get pay stubs, w2s or like sometimes we have to do an employment verification.
Speaker 2:For everybody, even if they're not on the loan. Okay.
Speaker 1:Yeah, because interesting.
Speaker 2:I didn't realize that the VOE part, but I knew the household size and that stuff.
Speaker 1:I mean, unfortunately, as we know, people don't always tell the truth, and so if you're just like, hey, it's going to be, you know, bobby and Sally, sure, but then it's just like, nope, sally doesn't work.
Speaker 2:Yeah.
Speaker 1:And we look at any other documents that would prove Sally works, then you have to take that into consideration. Um and so yeah, but I just think that that's very key to know. If you are a VA buyer, then you're not going to have a down payment. You would have closing costs.
Speaker 2:So with the VA buyer. Let me ask you for CCM, it used to be that the sellers had to pay for a pest inspection. Va still requires a pest inspection to be done, correct, does it have to be paid by the seller? For CCM, because I've had some lenders who were like we don't care who pays for it, as long as it's completed and clear. And then I've had lenders recently that are like, hey, the buyer cannot pay for this, the invoice has to be in the seller's name. Kind of goes off topic, but it's just something as we're talking about VA legally I ain't answering that question.
Speaker 1:I plead the fifth. No, I'm just kidding, I'm like wait.
Speaker 2:What Does it really meant, I guess, as long as it's done and clear.
Speaker 1:I don't think that you can't tell someone legally that they can't do something. Same way back to like 2019, 2020, 2021, where you had buyers who were paying the seller's cost and paying, you know, for sellers, moving expenses.
Speaker 2:You know, moving expenses and isn't the norm, I guess.
Speaker 1:And so I do feel like, regardless of whoever pays for it, it's always made out to the seller, and I don't know if it's just like the inspectors are aware of that, like how it normally is, and that's how they put it.
Speaker 2:It just depends, because it doesn't, but okay.
Speaker 1:But truthfully, all we care about is that you have to get a paid invoice or you have to get an invoice for it to be paid at closing.
Speaker 2:Right, okay.
Speaker 1:So but yeah like it's required. That's how I look at it, okay, um, but then, going back to you know, hey, I want to first time home buyer alone. Again, it just really depends on what makes most sense for you, um, but like if you are someone who needs down payment assistance, so I'm just going to rattle off some CCM, we do have internal down payment assistance programs, um and like we offer a hundred dollar down HUD, um option, um and so, like you won't make, your down payment is a hundred dollars technically.
Speaker 2:What do you have to do to qualify for that?
Speaker 1:It is Well one. It has to be like a HUD approved, Like HUD has to be selling the house.
Speaker 2:Okay, so that's only for HUD homes.
Speaker 1:Yes, only for HUD homes. There's also like um which? Is what you had talked about in a previous episode with that buyer who has so much equity and she closed and it was like I'm excited for her and I don't even know her, yeah.
Speaker 2:Like I'm, going to look at HUD homes.
Speaker 1:That I mean it's just like to where she bought this house. It just never happens that way.
Speaker 2:Yeah.
Speaker 1:And yeah, I just actually talked to her yesterday and she was like I can't wait to have, like my first um party, because I'm going to invite you and your family and I'm like, well, you live like now like five, seven minutes for me, so that is very doable, um, so there's that we also have a um. It's called smart start, but basically it's through Freddie and Fannie to, where it is a grant but they will give 2% up to $4,000 of your purchase price. Okay, so if, for an example, if it's at 200,000, they're giving you $4,000 to go towards your down payment or closing costs, okay, um, if something that also just came out is, if you are 50% under the area um median income, you can actually get up to on conventional loans only um, up to like an additional $2,500. So in some cases, if you are doing that I mean you're you could easily get we'll just call it 6,500 bucks, um, so you have that out there.
Speaker 1:And then we also have, uh, what is our other internal one? It's also a grant, but it's through Freddie and Fannie. Um, it's where, like, they give you a percentage Um, and then you have one of my favorites when they have money, but they don't always have money and that's communities first. They're based out of Cincinnati and they give you a percentage of your loan amount, so it's not based upon your purchase price. So sometimes you have to kind of know what we're working with. But you can't pair it with um Like I can't use that and like Canton's program.
Speaker 2:So like you can't use the two together, how do you qualify for that? The community first.
Speaker 1:Communities. First is it will do FHA, usda, va and conventional, but you have to go off of their interest rates. It's service through US bank, but it is like I said, they're based out of Cincinnati and they give you a percentage of the loan amounts. So right now, as of this week, they only had it available for FHA, usda and VA, and it is 3% of your loan amount, but the rate for it was at 8.125%.
Speaker 1:And so then it's just like hey, you're only going with that option If it's like, and I'll be all like- this actually is what needs to happen because you as a buyer, you don't have the funds, but you also don't have the credit score debt to income ratio to allow us to go with a different program. Why it's one of my favorites is just because they're more consumer friendly and so like. If you have a 620 credit score and you can even do like a manual underwrite with them and so like, it's just great. And it doesn't require repayment Everything I've mentioned so far, you don't have to pay it back. Then we have a few others.
Speaker 1:There's one through Essex which it does require repayment. They have another one through Chanoa and they also require repayment, and Essex will give you the for FHA loans. They'll give you the 3.5% down as a second lien against the property and on a 10 year repayment plan. So their interest rate is always going to be 2% higher than whatever your fixed rate is on your first mortgage. So if you are buying a house and, like the first lien, your normal mortgage payment is at a 6.75% interest rate. Just know that on your 3.5% down payment that you're paying back, that's at 8.75. Chanoa is the same way, but Chanoa gives you 3.5% towards a down payment and cost or 5%. They do have a forgivable option, but the rates on those are even higher.
Speaker 2:So what is like the criteria that you need to do down payment assistance as a whole? Like, obviously there's all these different options for a reason, but like, for example, my sister like whatever she used.
Speaker 1:OFA and that's Ohio Finance Housing Agency, and they are one of the larger ones and like they never run out of money. So if someone tells you that they ran out of money, double check it, because they just they don't and they've been around for a long time. Their requirements are they want you to have basically a 650 credit score. If you are 650 to 679, your debt to income ratio, including your mortgage payment, has to be under a 45 backend. And then they have three options for you. If you are a first time home buyer, to where, if it's no assistance, they have a market rate, they charge you 1% origination, but their rates with no assistance can typically be lower than whatever the market rate is for that time, then they can give you 2.5% towards your cost and everything. But in reality, because they charge you that 1%, you're really getting 1.5%.
Speaker 2:Yeah.
Speaker 1:Or they'll go up to five and then again, but you're really getting four because, like, they're taking their 1% origination out of what they're giving you.
Speaker 2:Right.
Speaker 1:But then if you are 680 or higher credit score wise, your backend debt to income ratio can go up to a 50%. But they have it's called your choice and which you just have to be a first time home buyer. That can be FHA, va, usda or conventional Rates are gonna be different between those or they have grants for grads. They do give you a break on that just because, like you, just recently graduated from college. And then they have the Ohio heroes, which is really big for teachers, doctors, nurses and fire yep, firefighters, defense officers yes, that's huge just because they don't always get the recognition that they need Right.
Speaker 1:And so on, all levels, and so like they give you a break on your interest rate and they also like just help you out with the assistance that you would need to help put you into a home. The majority of people that I would use it for and have used it for our nurses, that's who usually fall into that category and they want to take advantage of the Ohio heroes and grants for grads. It's good if it makes sense for you, but if you are someone who is getting ready to graduate or just recently graduated, then Take advantage of it. If you have the opportunity to qualify and, like I said, you can do them for any loan type. The Additional perk for them is that you can also get a certain percentage on your next home. So it's not as much, but let's just say here you are a current homeowner and Life has happened.
Speaker 1:Yeah you need to sell your house. You're not going to make a ton of money and you want to buy. You don't want to rent but you need to be able to Get into a new property because you have to completely Restructure your life. They will give you a percentage and it typically is like it's 2%, but then, like, if you have some money that you're going to walk away with, it'll allow for you to still be able to move forward and buy your next house.
Speaker 1:Their biggest things are if you Refinance or sell your property within the first seven years of owning it, you do pay it back Mm-hmm, that is the catch 22 to their program. But ultimately, like, because they never run out of money, it's not free. But if you don't refinance or sell your house after that seven years, the lien gets released and you don't have to pay it back. So you're in a position where you can refinance, so on and so forth. So that's good for that one and then another one or two more are Canton's program and mass. Canton's program is Income driven and you also have to buy within the city limits of Canton right, but it could be playing Schools as long as it's can see yes, okay, but once you in local schools.
Speaker 1:Yes, okay, they will tell you. You do meet with them to get yourself. Like you know you, you can have a consultation with me. I'll get you pre-approved because after you apply with them, they want to see your pre-approval letter. Same way with Maslin. But then at that point in time, once they get your pre-approval letter and you have to be a first-time home buyer, they will then confirm or deny if you qualify.
Speaker 2:What are their qualifications?
Speaker 1:It's income and it's lower. Yeah, most of my clients don't end up qualifying for Canton cities program.
Speaker 2:I've had maybe one or two, but it is a little more difficult, I would say, than Masslin's.
Speaker 1:Yes, masslin's is a little bit more consumer-friendly, because Canton's program will give you up to five thousand dollars but if you don't need the full five, they're not giving you the full five. So don't go into it Expecting the full five. They're only going to give you up to five. But they have to be able to approve the final closing disclosure and that is how they determine on like we can communicate with them throughout the process, give them Like a preliminary CD, those sorts of things. But it goes back and forth because they have to have the final say on exactly how much money they're going to give you up to that five grand Masslin's. On the other hand, you still have to apply and you have to give them your pre-approval letter. They have to confirm that you are a first-time home buyer and I had a situation last year to a young lady who owned a mobile home and it doesn't always happen but it did get converted into real estate and Because it was converted into real estate, she no longer qualified for the program.
Speaker 1:And you know, I Saw her perspective is just like, hey, I don't even own the land that this property sits on.
Speaker 2:Yeah.
Speaker 1:And so I don't really see how you are considering it this way. But unfortunately she didn't. But we still figured it out. She got to buy her house and she's happy and what is the cap for mass land?
Speaker 2:How much do they give you? I can't remember is it it. Does it vary?
Speaker 1:because it varies based upon On where you fall at in their spectrum. Okay and so Like I've had some people get up to 7%. That's a lot of money.
Speaker 2:That's a lot of money. So should we get To and put it on like just links, like here's the information for it, for our buyers who are interested, like who are the contact people for that?
Speaker 1:Yeah.
Speaker 2:I haven't used it in either program in a while. To be honest, it's been a few years so yeah, I mean. Or should they just start here and then we direct them as they go?
Speaker 1:Yes, I would say that that's easier because, like, if they change something, I don't have to go back and Delete it? Yeah for sure, Especially if it's not something that, like, they don't send out an email blast and say, hey, like we've updated this. I would want to mislead you, but if that is something you are interested in, let's have the conversation and then, like I said, they want you to be pre approved and then you go to them and apply right, and I will say that even as an agent.
Speaker 2:We've talked about this on here. Like I forget that these programs exist sometimes. So not every time I sell a house in mass lim Masslin to a first-time buyer, am I like, hey, let's check and see if you qualify for this program? Yep, not everybody needs it. But even if you don't need it, you can still qualify. Why not take advantage of it if you're buying within the city that you want to be?
Speaker 1:Yeah, because it's like that's how I look at you know All of these programs, especially on any of them that don't require repayment. Because if you are In a position, especially where rates are at right now home prices and if you are someone who, let's just say here, pays $1,100 a month for rent, okay, and Now you want to buy a house, your Mortgage, our mortgage, principal interest taxes and insurance are going to put you at We'll call it $1,500 a month. Mm-hmm, that is more than what you are used to paying for housing and you save money and you're just like okay, well, you know I want to go this route, but because that's more money, like what you're comfortable with and what you're used to, do you A keep an emergency fund, do you have any debt that would need to be paid off? That could help make a difference on the difference in what you're going to be paying in your housing? Or like do you have any money invested for retirement?
Speaker 1:Like, are you buying a house, you don't know if it's going to have appliances or not, or if you're currently renting, you can't take the appliances with you. You're going to have to open up a credit card, you know, to have appliances where, if you don't have to. So it just all kind of ties together of making best use of your money but also being smart with it. And if you can qualify for a grant, use the grant. If it doesn't stand in your way and like Masslin's program and can't like neither of them, care if you're pre-approved conventionally FHA US it's very rare, and do you have to pay them back?
Speaker 1:No.
Speaker 2:Yeah, and then it doesn't change your interest rate like some of these other programs. So if you can use them, let's use them.
Speaker 1:Right, and that's how I look at it. And even same way with like the like internal ones that we have for like the smart start again, sometimes, like for people, if we can, because you only can use those for conventional loans. But if you don't have to have the like required mortgage insurance like your PMI, but you qualify for this, let's buy you out of it. Or maybe beforehand you didn't want to pay any points for an interest rate but you qualify for this. So now we can use that to you know, buy your rate down some more and I hate to say it like, but it's, you know, like free money. But when you qualify for certain things, it doesn't make you less of a person, it doesn't make you, you know, like you, just you qualify, you qualify take advantage of it.
Speaker 2:Take advantage, yep, because one day you'll wish that you did yeah.
Speaker 1:And so, like you could go into a house and now you're out of all of your money because you didn't want to take advantage of something and you have to buy X, y and Z. You know you didn't really account for or whatever the case is, that was aggressive.
Speaker 2:Yeah, that's a long story. Well, I always sell my buyers too, like it's less out of pocket.
Speaker 1:Yeah.
Speaker 2:Like, okay, you don't need closing costs, but there's no other offers, let's ask for them because you can buy down your rate. It's less out of pocket for you for whatever, so all right. Well, I feel like this was good, like that was a lot of information to digest. There's a lot of programs that are out there that you just have to utilize and know how to get a hold of them.
Speaker 1:So yeah, and when we have a consultation call, if you qualify, I'm going to tell you that you qualify for something.
Speaker 2:Yeah.
Speaker 1:Or like when I'm looking at where your money is coming from, or if I look at your bank statement and you have several large cash deposits that don't have a real explanation for them. But we need to pivot and look into something else. I'm going to have that conversation with you.
Speaker 2:You're gonna lay out all the options.
Speaker 1:And just because, like one thing that agents always ask is are you sure they can't go conventional? I promise you I've explored it. That would have been an option, right Eric?
Speaker 2:does it make sense for their? Situation or whatever so.
Speaker 1:But yeah, I like this one.
Speaker 2:Yeah, that was good. Definitely something to keep in mind about. If you're looking in Canton City or Maslin City and you are a first time buyer, is there a certain price point? No, so both of them are off of income.
Speaker 1:Yes, okay, well, there you go and income and, like you, have to be a first time home buyer.
Speaker 2:Right, right always.
Speaker 1:And they do break them down for your household size. So it's like one to two, three to four, five and more. But yeah, if someone emails, like even if you emailed me or if you called and you just that's all you wanna know about right now, like I have it saved on my desktop and I can literally just send it right to you, or you can Google Canton City Down payment assistance Assistant Maslin down payment assistance program. It'll take you to all the information and sometimes, when it comes to the income, that's where it gets into the nitty gritty, because they're gonna ask you for your last 30 days worth of pay stubs and those sorts of things. But again, they can start the process with you, but they want to make sure, before you get too far ahead of yourself, that you do qualify for a mortgage and they wanna see that before they can give you like a final stamp of approval. So just take all of that into consideration. But it never hurts to look up information and just kind of read it for yourself.
Speaker 2:For sure and know that you have options.
Speaker 1:Yes, absolutely.
Speaker 2:All right, well, thanks, I know that was a lot for you, a lot of information.
Speaker 1:So when Tiff cuts these clips I'm like why isn't Bri talking?
Speaker 2:Well, that's the bread and butter, literally the money. All right, well, thank you guys for listening. Of course, as always, reach out to us with any questions or any comments that you have, and we look forward to working with you.
Speaker 1:All right, bye guys.
Speaker 2:Bye Toodles.
Speaker 1:All right, friends. As we close things out today, remember, home ownership is more than just a roof over your head. It's a symbol of your strength, resilience and determination.
Speaker 2:Take action, embrace growth and never be discouraged about where you are in your journey.
Speaker 1:And remember to follow us on Instagram at realityofrealestatepodcast.
Speaker 2:Our emails are linked in the description below. You can reach us at Christopherlynch at CCMcom. And my email is blaymanrealtor at gmailcom. All right, toodles.
.jpg)
