Down Payment Assistance FAQ

What is a first-time homebuyer?

To be considered a first-time homebuyer you may not currently own property, or have owned property within the last 3 years.

What does it mean to be in contract and have a pre-approval?

Before we will approve your DPA application and reserve funds for you, we ask that you have already been working with a first mortgage lender to determine your creditworthiness and the amount you can borrow for the purchase of your home.  Once you have made a purchase offer on a home, and the seller has accepted that offer, you are considered to be “in contract”.  NeighborWorks Umpqua has HUD Certified Housing counselors on staff to help you with the home buying process.  Call today to get your questions answered!

What is my “gross income”?

Gross income is the amount of money you earn from all sources before anything is withheld or taken out for taxes or other deductions.  Other deductions might include health insurance, child support, retirement account contributions, etc.

What are Liquid Assets?

A liquid asset is a bank account or asset that can be quickly made available as cash.  Examples include savings accounts, checking accounts, money market accounts, stocks, bonds, and mutual funds.

What is Debt to Income Ratio?

The debt to income ratio is a calculation of how much you owe each month on your debts (credit cards, car payments, etc.) compared to how much you earn.  We total up all your monthly debt payments and calculated that as a percentage of your total monthly gross income.

What is Loan to Value Ratio?

The Loan to Value Ratio calculates the total home loan amount (the amount borrowed) as a percentage of the home value.  We add up the total of your mortgage amounts (first mortgage plus DPA loan) and divide it by the appraised value of the home.

Do I have to pay back the Down Payment Assistance? Is this a grant or a loan?

This Down Payment Assistance program is a loan product.  It is not a grant.  Although we are not charging interest or requiring a monthly payment, the loan does need to be paid back when you move, sell, or refinance.

Do I have to attend a home buyer education class and meet with a home buyer counselor to get DPA?

Yes.  Attending a home-buyer education course and meeting one-on-one with a homeownership counselor is a requirement to be eligible for this loan program.  NeighborWorks Umpqua offers both services through the Financial Opportunity Center.  To meet with a counselor or sign up for a course, email us or call 541 – 673 – 4909.

What does “Interest Free” or “No Interest” mean?  What fees will you charge me?

The Down Payment Assistance program does not charge any interest or annual fees for this loan.  We do charge for actual costs to close this loan, such as credit report fees, recording fees, and reconveyance fees.  Also, the required home buyer education and counseling may cost up to $100.  To meet with a counselor or sign up for a course, email us or call 541 – 673 – 4909.

Can I use the DPA loan to pay down my debts?

No.  Down Payment Assistance loans may only be applied toward down payment and/or closing costs.

What is private mortgage insurance, and how can DPA help me avoid it?

Private mortgage insurance (PMI) is mortgage insurance that you pay for to protect the lender if you stop making payments on your loan.  It is usually required for conventional mortgages where the buyer pays less than 20% down payment.  PMI can be paid with an up front premium, as part of your monthly mortgage payment, or both.   A Down Payment Assistance loan may be able to help you increase your down payment enough that PMI is not required.



Roseburg Office: 605 SE Kane St., Roseburg, OR 97470, (541) 673-4909, FAX # 541-673-5023
North Bend Office: 1992 Sherman Ave., North Bend, OR 97459, (541) 756-1000

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