First mortgage and down payment assistance for 1 or 2 unit single family homes
Buying a home is a daunting process, and FANO knows that securing a mortgage and supplying a down payment on a home is a huge obstacle to overcome. That’s why we’re here to help you own your piece of New Orleans by providing a first mortgage paired with down payment assistance options to suit your needs.
Whether you’re a first-time homebuyer or an experienced homeowner looking to buy a new home, a first mortgage and down payment relief are never far away.
- Save money that will help you qualify for the first mortgage.
- Keep savings that can be used for other household needs, like purchasing appliances or buying furniture.
- Start with more equity in the home.
Down Payment Loan
WHAT IS IT?
This product is a 30-year FHA or Freddie Mac first mortgage with an interest-free second mortgage (equaling no more than 10% of the purchase price) to use for down payment assistance.
HOW DOES IT WORK?
After qualifying for a first mortgage, you’ll receive an interest-free loan as a second mortgage. This second mortgage is to be repaid monthly beginning and ending the same time as the first mortgage payments.
Down Payment Grant
WHAT IS IT?
This product is a 30-year FHA or Freddie Mac first mortgage with a forgivable second mortgage (equaling 3% or 5% of your approved home loan) to help with your down payment.
HOW DOES IT WORK?
Once you qualify for a first mortgage, you’ll receive a sum of money that you would not have to repay, but you must remain in the home for at least 5 years.
Eligibility & Terms
- Individuals or families
- Household income below $104,960
- Credit score above 640
- Total debt load less than 45% of income
- Earn 12-hour Homebuyer Education Class Certificate
- Qualify for first mortgage with participating lender
Where / what:
- Orleans Parish
- 1 or 2 unit single family primary residence
- Move-in ready home (no renovations)
Review the choices below to determine the best first mortgage and down payment assistance option that suits your needs and eligibility.
Resources & FAQs
In order to qualify for the program benefits, homebuyers are required to apply for a mortgage at any one of our participating lenders.
What is Own New Orleans?
Own New Orleans offers a first mortgage and up to $20,000 of down payment assistance to qualified buyers who want to own a home in New Orleans. Homebuyers can choose the down payment assistance in the form of a forgivable grant at 3% or 5% of the first mortgage or a zero-interest loan at 10% of the purchase price. If you choose the loan option, the amount must not exceed $20,000. If you receive the grant, you must remain in the house for 5 years for the second mortgage to be fully forgiven.
How do I apply?
FANO’s mortgages are originated through our Participating Lenders. If you have a banking relationship with one of these lenders, you may choose to work with them or select another from our list. The lender will be able to guide you on the financial documentation you need to provide and the type of loan product that you would qualify for. If you are a first-time homebuyer, you must also complete a 12-hour homebuyer education and training course offered through one of the Participating Homebuyer Training Organizations.
What is the minimum required credit score?
The minimum credit score varies between the loan products that are available. For Freddie Mac and VA loans, the minimum score is 640; for FHA loans, the minimum score is 660.
What are the income requirements?
The income limit is determined by the specific loan product. For Freddie Mac, the limit is $104,960 regardless of household size; for FHA and VA, the limit is $91,840 regardless of household size.
What kind of home can I use the down payment assistance to purchase?
The home must be used as your primary residence but the type of home varies based on the loan product you choose. You may purchase a 1 or 2-unit home (detached or attached), condos or townhomes under the FHA and VA loan products. However, you may only purchase a 1-unit home under Freddie Mac’s loan product. Manufactured housing, mobile, recreational, seasonal or other types of vacation or non-permanent homes are not permitted.
Can I buy a fixer-upper?
Only homes that are move-in ready are eligible for financing in the Own New Orleans program.
Can I buy a double and rent out one side of the home?
Yes. If you choose a FHA or VA loan, you may purchase a double as long as you live in one side as your primary residence.
Do I have to be a first-time homebuyer?
You do not have to be a first-time homebuyer. However, for the Freddie Mac loan product, you cannot own other property at the time of closing.
Do I have to complete homebuyer training?
If you are a first-time homebuyer, you must complete 12 hours of homebuyer training through one of our participating organizations. The course must be completed prior to loan closing.
What are the terms of the 1st mortgage?
The first mortgage is a 30-year, fixed rate, amortizing loan with 360 level monthly payments. The interest rate is subject to current market conditions and changes daily. The maximum loan size is subject to current guidelines; for 2018, the maximum mortgage for Freddie Mac and VA is $453,100 and for FHA is $294,515.
What are the terms of the down payment assistance?
The down payment assistance is in the form of a second mortgage and can be taken as a grant or a loan. The grant is a 5-year deferred loan that is forgiven at the rate of 20% per year provided that the borrower is not in default. The loan is a 30-year amortizing loan with monthly payments due; this loan is never forgiven.
How may I use funds from the down payment assistance?
The proceeds may be used for down payment, closing costs, prepaid, upfront private mortgage insurance and other related program and mortgage loan fees and expenses. The second mortgage proceeds may not be used to pay off debt.
*All of these questions are subject to current guidelines.