FAQ – Escrow Time Periods With Down Payment Assistance Programs

On each Down Payment Assistance Program page there is a section which indicates how long it takes to close an escrow with that particular program.  These times on the pages are based on the lenders that I recommend that my clients use.  As you read below you will see that different loan companies have different areas that they focus and try to excel at.

First it is important to understand that some loan companies are faster than others.  It depends on what they are trying to excel at.  For example, CMG Financial excels in speed and can get an FHA loan done in about 20 days.  But to be able to do this, they have to focus in on the very easiest of loans.  You cannot get any Down Payment Assistance Programs with CMG.  Another good example is Bank Of America.  They are much more flexible in the types of loans that they will do and they will do Down Payment Assistance Programs, but it can be a nightmare getting your loan closed.  It can really take a long time with FHA loans taking up to 90 days in some cases.

Now that you understand that first point about the lenders, let’s take it one step farther.  While Bank Of America can be excruciatingly slow on the FHA loans, they are fairly fast at Conforming (conventional) loans.  Within each loan company, they have also desired on what products they want to focus on (their bread and butter), those products get the most attention and the others get second place.

This can cause two issues for the buyers.

• In order to apply the escrow times shown on the pages, you would need to know that your lender focuses on the same things as the lenders we suggest.  This is important because the Down Payment Assistance Programs are already a longer transaction than a standard transaction so running late on your escrow is not received well by the seller.
• The buyer may need or want to change loan products (From FHA to Conventional, etc) from time to time.  Example:  You were approved on an FHA loan in Escondido with 5% Down Payment Assistance).  Then you looked in Poway and saw that you might be able to get 70,000 in Down Payment Assistance.  The increased Down Payment now meant that you qualified for a conventional loan with no PMI insurance.  The question is, are you using a lender that excels at both types of loans.

It is critical to your success that you pick a lender and an agent that focus on the Down Payment Assistance Programs.  They must have a clear understanding on what the transaction requires and the timelines needed to accomplish all tasks.