FAQ – Is My Lender Required To Be On An Eligible Lender List For Me To Get A Down Payment Assistance Program

Most Down Payment Assistance Programs require that the lender show some competency in the administration of these extremely complicated programs. Every lender and every real estate agent claim to be First Time Home Buyer specialists.  But in truth there are only a handful in the entire state of California.  I was on the San Diego Association Of Realtors Housing Opportunity Committee for about 5 years.  We are the ones that write the manuals and train the agents.  If you have done your homework and have been scouring my site for information, you have probably already spent more time learning than the 4 hours that are required for a realtor to become an expert.

By now you must also have realized that there is a lot going on here.  Down Payment Assistance Programs are the hardest and longest transaction that any buyer can try to accomplish.  they routinely take 45 to 90 days to complete and a huge number of the “Expert” agents and lenders don’t have any idea of what they are doing.  Consequently a huge number of the DAP transactions fail after being is escrow for months.  When the DAP administrator determines that they will only allow lenders who have at least taken a few hour course to do your transaction, it is a very basic step towards trying to protect you and their program.  Here are some thoughts

  • It probably only takes 2 to 8 hours for the lender to get on the list, why has he not already done it?
  • Unfortunately once a lender is on the list, he like agent who took their course now look like experts to the buyers.  In this hardes of hard transaction, how many transactions has the lender and agent done?  If it is not DOZENS< you should find another lender.
  • If a lender and real esetate agent try to get you through a DAP program and the transaction fails, they lose absolutely nothing.  You on the other hand stand to lose
    • The 400- 600 you spent on an appraisal.
    • the 250 to 500 you spent on a home inspection
    • The 1,500 or so that y9ou put down as as your earnest money deposit.  They will tell you that you can’t lose this because you have contingencies, but some of these transactions take 90-105 days to complete.  It is realllllly hard to get a seller to keep their house of the market for 3 to 4 months if you are not confident enough in your lender and agent to remove your contingencies.  Don’t misunderstand me, I am not suggesting that I feel so confident that I gamble with my clients money and remove contingencies when we are supposed to.  No, we hold out until the seller  threatens to walk away, but then the buyer must make a really scary decision, Do you feel confident enough in the agent and the lender to remove your contingencies and move forward, or do you cancel and walk away.  If you cancel not only do you lose your house, but you lose the money spent on the appraisal and home inspection.
    • You also stand to lose what will have become the home of your dreams.
    • It will be much harder for you to get an acceptance on you offer.  As I mentioned earlier, the majority of the agents and lenders do not know how to do these and as a result the majority of these transactions fail.  The listing agents know this and are hesitant to encourage their sellers to accept DAP offers.  It helps when the agent like myself can point out that I have done tons of these and so has the lenders that my clients use.  In 8 years we have only lost 3 escrows and never from a DAP failure.
  • Yes, many of the programs insist that you use a lender on their list, and they did this for good reasons, unfortunately it backfired and harmed the buyers.  Now all of these lenders who took a couple of hour course are now claiming to be experts and there is no way for the buyer to know which ones are and which ones are not.

Don Gardnier has helped HUNDREDS of buyers through these programs.  Call us and let us set you mind at ease.  We will help you find an expert DAP lender, and we will help you succeed in getting into your First Home!

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Still Have Questions? Call 877-696-7373 x777 or email Don Gardnier at Don@sd4u.com

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