Quick Answer:
The down payment assistance program, HomeStart Advantage, gives Louisiana homebuyers 4% of their loan amount to put toward a down payment, closing costs, or both. To qualify, your household income must be $125,000 or less. You’ll also need a 640 credit score and a homebuyer education class. Once you’ve been in the home for 60 months, the help is forgiven.
Plenty of Louisiana families can afford a monthly mortgage payment but struggle to save the cash needed upfront. It doesn’t matter how many homes a buyer has bought or what they do for work. This statewide program is made for any type of buyer in this situation.
How Does HomeStart Advantage Work?
Buyers receive 4% of their final loan amount rather than 4% of the home’s price. Better yet, you decide how to use it. Most buyers put it toward the down payment, but it can also cover closing costs and prepaid items like insurance.
The best part is how repayment works, because in most cases there isn’t any. This money comes as a second mortgage with a 0% interest rate and no monthly payment. Once you’ve lived in the home for 60 months, the full balance is forgiven. Selling or refinancing before then, on the other hand, may mean paying it back.
To see the numbers in action, take Keisha, a dental hygienist in Thibodaux who’s tired of renting. She finds a $260,000 home and chooses a conventional loan with 3% down, which puts her loan amount at $252,200. HomeStart Advantage then gives her about $10,088. That’s enough to cover the down payment, with roughly $2,300 left over for closing costs.
Who Qualifies for HomeStart Advantage?
You’ll need to meet a few requirements in order to use HomeStart Advantage. Your lender will go over each one with you, but it helps to know them before you apply:
- Household income of $125,000 or less. This includes every adult 18 or older who will live in the home, even if they aren’t on the loan.
- A credit score of 640 or higher. This is the minimum for every buyer using the program.
- A homebuying education class. At least one buyer who will live in the home must complete it, and HUD-approved providers offer it online.
- No other home in your name at closing. You don’t need to be a first-time buyer, but the new home has to be your main residence.
Along with these, your lender will check that your debt-to-income ratio stays at or below 50%.
What Loans and Homes Are Eligible?
The 4% assistance isn’t tied to one type of mortgage. It pairs with FHA, VA, USDA and conventional loans through Fannie Mae and Freddie Mac. That flexibility lets a lender choose the loan that best fits each buyer’s credit and savings. Every option is also a 30-year fixed-rate mortgage, so the rate never changes.
The home itself also has to meet a few guidelines. For starters, its price can’t go over the FHA loan limit for the parish where it’s located. Single-family homes, townhomes, and condos all qualify. Some manufactured homes are eligible too, provided the buyer has a credit score of at least 660. Duplexes, single-wide mobile homes, and second homes, however, don’t meet the program’s rules.
How Do You Apply for HomeStart Advantage?
Once a lender is on board, much of the work happens behind the scenes. Still, it helps to know what to expect from start to finish:
- Choose a participating lender. Not every lender offers this assistance, but DSLD Mortgage is one of the approved lenders.
- Get pre-qualified. The lender reviews income, credit, and debts to find a comfortable price range.
- Take the homebuyer class. Finishing your course early helps prevent any holdups at closing later.
- Find a home and sign a purchase agreement. Your lender can only reserve funds once there’s a signed contract.
- Close on the home. The lender handles the program paperwork, and the 4% goes toward your costs at closing.
A few thousand dollars can be the difference between renting another year and moving into a home of your own. At DSLD Mortgage, our loan officers can check whether you qualify and compare loan options side by side. From there, we handle the program paperwork all the way to closing. Regardless of the home you choose, we are happy to help homebuyers get the assistance they need to get to the closing table.
How much will your mortgage be? You can use DSLD Mortgage’s Mortgage Calculator to estimate your monthly mortgage payment.
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Mortgage FAQs
Owning a home is a dream we help bring to life every day. You probably have a lot of questions, and that’s a good thing! Here are the answers to some of the most frequently asked questions we get, designed to make your path to homeownership as smooth as possible.
In this case, you may have to pay it back if you sell, refinance, or move out before 60 months. After that point, the full balance is forgiven, and you won’t owe anything.
No, the limit stays at $125,000 no matter how many people live in the home. However, it counts income from every adult 18 or older in the household, not just the buyers on the loan.
The program doesn’t require a minimum amount of your own money. Depending on your loan type, though, your costs could add up to more than the 4% assistance. Your lender will tell you the exact amount before closing day.
Classes from HUD-approved counseling agencies count, including online options like eHome America and Framework. Only one buyer who will live in the home needs to finish it. Keep in mind that Fannie Mae’s HomeView and Freddie Mac’s Credit Smart courses aren’t accepted.
Begin Your Home Search with DSLD Homes
To get a feel for the lifestyle that awaits you in a DSLD Homes community, visit one of their communities throughout the Southern Region.
With a diverse selection of floor plans and communities to choose from, you’re sure to find the perfect fit for your lifestyle.
