Homebuyers Benefit from Cook Inlet’s Down Payment Assistance Program
The Cook Inlet Down Payment Assistance Program is a strategic initiative aimed at helping individuals in the Cook Inlet Region area overcome one of the major hurdles in the home buying process: the substantial down payments often required in mortgage transactions. This program not only assists with down payments but also synergizes with a first mortgage to save homebuyers money. A significant benefit of combining this program with a first mortgage is the potential to avoid monthly mortgage insurance, thereby reducing the overall housing payment.
Available Assistance: The program offers substantial financial support to eligible applicants, providing up to 20% of the home’s purchase price, with a cap of $60,000, in the form of a second mortgage. This second mortgage is a 30-year loan with a 4% fixed interest rate (APR of 4.083%). It’s important to note that these interest rates are subject to change, reflecting market conditions.
Eligibility Requirements: To qualify for the Cook Inlet Down Payment Assistance Program, applicants must meet several criteria. The annual household income must be at or below 120% of the area median income. Applicants are required to have a minimum credit score of 640. Additionally, the first mortgage debt-to-income ratio should not exceed 30%, and the total debt-to-income ratio should be no more than 40%. Applicants must also demonstrate the ability to maintain two months of “reserves” after closing. This reserve, calculated as two months of principal, interest, taxes, and insurance (PITI), can be held in various forms such as checking, savings, investment, or retirement accounts. However, individuals who have experienced foreclosure or bankruptcy within the past six years are ineligible for the program.
Property Guidelines: Properties purchased using funds from the Down Payment Assistance program must be the applicant’s primary residence. Eligible properties include single-family homes located within the Anchorage Borough, Kenai Peninsula Borough, or the Matanuska-Susitna Borough.
Income Limits: The program defines household income as the total income received by all household members aged 18 years or older who will reside in the home, regardless of whether they are on the mortgage. The income limits are as follows:
- 1 person household: $71,400
- 2 person household: $81,600
- 3 person household: $91,800
- 4 person household: $102,000
- 5 person household: $110,175
- 6 person household: $118,350
- 7 person household: $126,525
- 8 person household: $134,700
In summary, the Cook Inlet Down Payment Assistance Program is a vital resource for potential homebuyers in the Cook Inlet Region, offering significant financial assistance to make homeownership more accessible. By providing a second mortgage to cover up to 20% of the purchase price and setting clear eligibility criteria, the program aims to reduce the financial burden of homebuying and promote sustainable homeownership in the region.
