Two months ago I shared a summary on a new down payment program designed to help buyers manage the high cost of living in the Bay Area through a shared appreciation investment. Since that brief introduction, the program has improved and is worthy of a quick refresher.
A new program introduced in conjunction with Freddie MAC offers a down payment matching program for borrowers who have at least 10 percent down payment. This program will match up to 12.5 percent of the borrower’s down payment in exchange for participation in the long term appreciation of the home. By matching their down payment, they can avoid mortgage insurance, keep the loan at a budget friendly payment and buy into the home they want and can afford.
The buyer’s down payment, contributions to equity through monthly payments and equity built through improvements is protected—only the appreciated value of the home is shared with the investor.
What has changed is that now, the amount shared with the investor has decreased, creating an even more interesting option for homebuyers. The investor has reduced their interest in the property and they have reduced their fees to participate.
This program is worth review for any family trying to navigate homebuying in the Bay Area.
Jayson Stebbins is a 23-year veteran of the mortgage banking industry. Contact Jayson at 408-825-0220 or at stebbinsmortgageteam.com.
