This option provides the first mortgage plus 3% of the sales price of the property which can be used for downpayment or closing costs.
Funds for the 3% closing cost assistance are provided as a deferred loan (second mortgage) with a 0% interest rate.
No monthly payments are required.
If the property is sold or the first mortgage is paid off during the first five years, the borrower will have to repay a pro rata portion of the downpayment assistance to HOC.
This loan option may be combined with other FHA approved closing cost assistance, provided the borrower qualifies.
