FAQ – Maximum Asset Test For Down Payment Assistance Programs

Some Down Payment Assistance Programs will impose a Maximum Asset Test for the buyers using their programs.  Most often this means that at the conclusion of the transaction the buyer cannot have more than “x” in their bank accounts. Example:

  • The buyer wants to get a Down Payment Assistance program that gives him 70,000 in Down Payment Assistance.
  • The Down Payment Assistance Program has a Max Asset Test of 25,000
  • The buyer has 50,000
  • The buyer must use at least 25,000 of his money in the transaction (down payment, closing costs, etc)
  • The buyer gets the 70,000 in Down Payment Assistance, and still has 25,000 in his bank account at the end of the transaction.

There is the question, what is considered an asset??? This is hard to say as each program is unique and has different criteria. Having said that,

  • Cash in your bank account is always considered an asset
  • Stocks and bonds or other non retirement investments that show up on your taxes are many times considered an asset
  • Retirement Funds are rarely but sometimes considered an asset
  • Depending on the program their could be other guidelines as well.

The best thing to do is just to find out what programs you qualify for, then see what the guidelines are.
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