Homestead Trust represents Home Downpayment Gift Foundation, a 501 (c) 3 non-profit organization with headquarters in Maryland. This charity provides "gift funds" for down payment and closing cost monies to qualified buyers using an eligible loan program such as an FHA Loan. The gift funds needed are generally an amount determined between the lender and the buyer. The "gift funds" are a bonafide gift to the buyer. There is no obligation of the buyer expressed or implied to repay the gift amount at any time.
HOW DOES THE PROGRAM WORK?
A prospective buyer applies for an FHA loan to purchase a home. During the qualification process it is determined that the buyer can afford the monthly payment and taxes on the purchase price of the home and has a good credit rating. Unfortunately however, the buyer is short of funds for the required down payment and/or closing cost.
With this information, the seller is contacted and is asked if they would be willing to qualify the home in the Foundation's "down payment assistance program". The seller would agree to sell the home to the buyer for the full asking price. The seller would also agree to make a contribution to Home Downpayment Gift Foundation the gift amount needed by the buyer plus a service fee, after a successful settlement.
Once the seller agrees to make a contribution and the buyer agrees to accept the "gift funds' from Home Downpayment Gift Foundation, a buyer application is completed along with the gift letter and seller enrollment form. All of which is forwarded to Homestead Trust for processing. Homestead Trust wire transfers the "gift amount" from Home Downpayment Gift Foundation to the settlement office prior to settlement. The contribution by the seller to Home Downpayment Gift Foundation goes into a pool of funds which is used by the charity to repeat the process for the next homebuyer in need of gift funds.
If you have any questions or need more information
or by calling 1.877.550.7005
