Mary Beth H.: Hi, this is Mary Beth Harrison with Dallas Native Voice, and today I’m sitting with Jonathan Parisi, and he’s with Fairway Mortgage, and I have so many questions for you today.
Jonathan Parisi: Absolutely.
Mary Beth H.: Something I really don’t know a lot about, and I feel like I know pretty much about what goes to the beginning and end of real estate. But you’re going to talk to me about grants. Because there’s certain grant programs. Talk to me about that and what does that even mean to have a grant versus walking into you and going, “Jonathan, I want an FHA loan.”
Jonathan Parisi: An epic channel. Sure.
Mary Beth H.: What’s our difference here?
Jonathan Parisi: So a lot of my buyers, just because I’m out of college, and younger buyers and newer buyers.
Mary Beth H.: Right.
Jonathan Parisi: We don’t have that 20% saved up. And so I started to,
Mary Beth H.: A lot of us don’t.
Jonathan Parisi: Exactly. A lot of people go ask mom and dad-
Mary Beth H.: Exactly.
Jonathan Parisi: For some help, but we don’t have that 20% saved up. So we started looking into grant programs and there’s a Seth program and TSAHC. Those are the two that I familiarize myself with.
Mary Beth H.: OK.
Jonathan Parisi: It allows our buyers to purchase a home with really no money out of pocket.
Mary Beth H.: Oh wow.
Jonathan Parisi: You can get between 3% up to 7% of a grant or a silent second lien.
Mary Beth H.: So, okay. So, I go in and let’s just use $100,000 house. Let’s make this really easy right now. So a $100,000 house, I don’t have to put anything down.
Jonathan Parisi: Correct.
Mary Beth H.: Right.
Jonathan Parisi: Because the grant will-
Mary Beth H.: Will pick that up. Will pick up the supposedly 3% or 7% down. And then that goes into, you said a second lien.
Jonathan Parisi: It could be as it’s a silent second lien. I mean it’s really-
Mary Beth H.: Do I have to pay it back?
Jonathan Parisi: There are limitations on it. So, if there is a forgiveness period-
Mary Beth H.: Okay.
Jonathan Parisi: Typically, three, four, five years, depends on the program that was selected.
Mary Beth H.: So, in other words, if I stay in the home for for more than five years, for example.
Jonathan Parisi: Correct.
Mary Beth H.: It just wipes it clean.
Jonathan Parisi: Correct. You don’t have to pay it back.
Mary Beth H.: Okay. All right. I totally get that. That’s good to know. But for example, if I were to sell the house, say in two years , for whatever reason. I got transferred to Atlanta and I need to move. So do I owe them that $3000 back or does it come out in the payoff?
Jonathan Parisi: It comes out in the payoff, but there are other programs that you don’t have to pay it back.
Mary Beth H.: Okay.
Jonathan Parisi: So depending on your plan for the home, your five year plan, three year plan, we can look into, and make it tailored for your specific needs.
Mary Beth H.: Okay. Good to know. So, take the example of I need to pay it back at closing, and say we’ve paid it down over two years to $95,000 I would, my pay off would be $95,000 plus that $3000 give or take. So it just all kind of comes out in the wash. It’s not like it’s going to ever just come out of your pocket like we need your money back right now.
Jonathan Parisi: Exactly.
Mary Beth H.: Okay. So what do I have to do to apply or be accepted for these kinds of grants?
Jonathan Parisi: So there are income limits. It is county specific. So, it depends on where you want to purchase.
Mary Beth H.: Okay. So for example, I couldn’t go to Highland Park, I couldn’t go to Lakewood for example. Curt’s would be like a 75206 or a 75205. So it becomes like a zip code within a County?
Jonathan Parisi: Correct.
Mary Beth H.: Okay. So you can only buy in certain areas and apply the grant?
Jonathan Parisi: Correct.
Mary Beth H.: Okay, good to know. All right, so it’s not just a one size fits all, you can go wherever you want.
Jonathan Parisi: It needs to be tailored to specific areas.
Mary Beth H.: Okay. That’s really an important,
Jonathan Parisi: Absolutely.
Mary Beth H.: Very important thing. So here’s some things I get asked all the time. I get asked, is there a first time home buyer program? The answer’s kind of, no, there really isn’t such a thing.
Jonathan Parisi: There really isn’t such a thing. I mean there might be something way out there that I’m not aware of.
Mary Beth H.: I’ve never heard of it either. That’s why I asked, because the first time home buyer is just a buyer. There are programs that make it easier for them because like you say, you guys have great longterm money. You kids coming out of college and first getting married, you have good longterm money in the way of jobs. That’s not your problem.
Jonathan Parisi: Right?
Mary Beth H.: It’s gathering all that money to make the first purchase, That’s where the problem comes in or the hardship does. So between FHA, which is how much down?
Jonathan Parisi: Three and a half percent down.
Mary Beth H.: 3.5% down, and then these grant programs, if you’re going to buy in these certain areas, could be nothing down.
Jonathan Parisi: Sure.
Mary Beth H.: Which just leaves you your closing costs. Now let’s talk about that too. Let’s go back to grants. I know I’m jumping thoughts here, but on the grant, are the closing costs the same as a normal closing or are they less?
Jonathan Parisi: There are some origination fees that are placed in there. Depends on the program. It could be between .5% or 1%.
Mary Beth H.: Okay.
Jonathan Parisi: So it just kind of depends.
Mary Beth H.: Okay. So kind of normal closing costs are there. And the way we help our buyers with that oftentimes is, again, let’s take that $100,000 house, and we want the seller to pay their closing costs.
Jonathan Parisi: Absolutely.
Mary Beth H.: And a seller can pay up to 3% in this instance. So that would be $3,000 of closing costs. So maybe we come in and we offer them $103,000 and then pay $3,000 of the closing costs.
Jonathan Parisi: Absolutely.
Mary Beth H.: In effect, they’re, they’re financing their own closing costs.
Jonathan Parisi: Correct.
Mary Beth H.: However, with the sellers netting what the seller wants, and the buyer’s getting the benefit of basically walking in with very little money down. So there’s ways to work around everything if we just get creative and we have a willing seller and a willing buyer, right?
Jonathan Parisi: Everybody’s got to cooperate on that.
Mary Beth H.: Yeah. So, as a first time home buyer, you have these grants and you have the FHA, which is the least amount of what I call a normal loan.
Jonathan Parisi: You can also do conventional too with the programs. You can do conventional VA, and USDA, and FHA. So all those would apply.
JP Parisi
Loan Officer TX/CO
NMLS# 1463915
1201 Hall Johnson Rd, Suite 100
Colleyville, TX 76034
Cell: 512-694-0966
Office: 817-812-2283
Fax: 817-796-1018