Mountain Mortgage Guy: Eagle County down payment assistance options vary, but they’re out there (column)
The Mountain Mortgage Guy
With the high price of homes in Eagle County, buying even a modest home can be a stretch for some people, but there are some options offered by Eagle County and some local employers that can help.
The most widely available is the Eagle County Loan Fund, which will provide buyers a second mortgage up to $15,000. The borrower is required to invest at least half of the loan amount from his or her own money. There are also income caps of $139,040 per year, and that counts combined income of all borrowers.
The borrower may not have assets (excluding retirement accounts) of more than 150 percent of the household income. One issue for some borrowers is that this program has a max debt-to-income ratio of 45 percent, which is sometimes lower than what a first mortgage lender will allow. The income cap is waived if the borrower is buying a deed-restricted home.
There are no monthly payments, and if the loan is paid back in 24 months, then there is no interest charged. If it’s not paid off, then interest is imputed at the same rate the property appreciates over time and the loan and accrued interest is payable at the time the property is sold. Appreciation between the purchase price and the sales price are averaged over the number of years the loan is outstanding.
Another feature of this program is employers may participate. If a local employer makes a grant to the Eagle County Loan Fund for the benefit of the employee, then Eagle County can include up to two times the amount of the grant and increase the loan amount accordingly.
There is also a program exclusively for Eagle Ranch buyers. The maximum loan amount there is $10,000. One thing different here is the interest is fixed at 2.5 percent annually and accrues with no payments due until the property is sold, refinanced or is no longer the primary residence.
There are also employer-based programs offering down-payment assistance to employees of the town of Vail, Eagle County, the town of Eagle and Eagle River Water & Sanitation District. All of these programs are different, and if you work for one of these entities, then be sure and ask your human resources department about details.
There is also a state-backed program that, in some cases, can give the buyer a grant of up to 4 percent of the purchase price. This will result in a higher rate on your first mortgage, though, and there is some serious math to calculate the exact cost of this “free” money.
Another program offered by the U.S. Department of Agriculture will provide 100 percent financing. Don’t get your hopes up, though, as there are a lot of quirks to qualifying for this program.
Eligible veterans can also borrow 100 percent of the purchase price of a home. This can be a great deal if you are a vet. One caveat: There are only a couple of VA-approved condo complexes in Eagle County. Getting a project approved takes about a month and costs somebody about $800.
There are several other options out there that will get you in with 3 percent of the purchase price as down payment. Putting the pieces together is like doing a jigsaw puzzle, though, and you will need a knowledgeable local professional to guide you through.
Chris Neuswanger is a mortgage loan originator with Macro Financial Group in Avon and may be reached at 970-748-0342. He welcomes mortgage-related questions from readers. His website and blog can be found at http://www.mtnmortgageguy.com.
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