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ACORN Loans-
the secret to getting a great loan
To Get an ACORN all you have to do is
register with us and then participate
in an online program to get your certificate and then our Finance
division will get you qualified.
For the San Diego Market in order to
qualify you can have an income of up to $75,000 with a purchase
price of up to $400,000. The closing costs are lower than most
loans and whats really great is that it doesn't require PMI
(private mortgage Insurance-which makes a loan more expensive).
other cities have different requirements
(see here)
WHAT IS
ACORN? it is a program that is administered by
a non-profit housing agency that works with lenders like our
affiliates nationwide to help low-income families become home
owners.
Whets the real difference compared to
a regular type loan? Lets say you make $75,000 or less
a year and am buying a $400,000 or less home. Getting an ACORN
loan will have you:
1. not having to put down a ton of money down
(can be 0 down if you use our
affiliate
lender )
2. save money with lower closing costs
3. NO PMI. Rates? a regular loan would have a rate of 5.625%
where an ACORN loan will be at 4.5%. Bottomline? lower rate,
lower closing costs and lower PMI (saving $90 a month). Its
really worth it if you can put a little time in and
register with us
What sets ACORN
apart from other counseling agencies?
ACORN is more than just an organization that
provides counseling and educational programs. ACORN negotiates
with various banks to obtain operating funds as well as to create
its own loan programs.
Why do lenders participate?
Lenders, in order to comply with federal regulations, have to
make loans to people less fortunate than the others. In their
portfolio of loans a certain percentage have to be what is called
"good will" loans. It basically attempts to keep lenders honest
and not predatory to where they loan ONLY to clients that make
them huge profits.
How can it help
low to middle-income families?
ACORN helps renters become home owners. All
that a renter needs to do is contact an ACORN office and express
an interest in purchasing a home. From there, ACORN is responsible
for the training and preparation of participants so they will
be ready for home ownership. This assistance includes help in
preparing for a mortgage approval, and includes help with credit
problems, saving for a down payment (if required), and preparing
for home ownership.
What happens
after a home buyer completes the program?
After completing a counseling program, an ACORN
staff member will help determine when the home buyer is ready
to purchase a home. A referral is issued to one the lender.
Because the borrower has participated in the ACORN program,
chances of approval are higher. Less than 2-3% of our ACORN
applicants are rejected, on average.
What makes an
ACORN loan easier to obtain than a conventional mortgage?
ACORN develops different programs with each
lender, so I can only speak for our ACORN program.
For starters, ACORN does not require mortgage
insurance, which saves the hassle of a second approval and the
cost of a mortgage insurance payment. Borrowers only need a
3% down payment, but only 1% must come from their own funds;
the remaining 2% can be gift or grant money. Norwalk and New
Haven in Connecticut, for example, offer 2% grant programs to
ACORN borrowers buying in their cities. In addition to needing
only a 1% down payment, borrowers can have the seller pay all
closing costs, including pre-paid items such as tax and insurance
escrows.
Maximum debt-to-income ratios are 45% and 50%,
as opposed to the normal ratios below 40%. If a borrower wants
to buy a multi-family, Fleet's ACORN program is much more liberal
than most, allowing rental income to count more towards qualifying.
Two areas that give many first-time buyers problems
are credit histories and down payment source documentation.
Under the ACORN loan, borrowers can use alternative credit sources,
such as rent and utilities, to document good credit histories.
Also, borrowers can have cash down payments under certain circumstances.
Do ACORN loans
offer a lower rate?
We offer the ACORN program at a rate approximately
1% below current fixed rates with no points. Most other lenders
offer some type of rate or point reduction for their programs.
Are there income
limits for the program?
Yes, but the income limits generally follow
the HUD median income ranges. These maximum limits are often
higher than what many people think. We told you above the limits
for San Diego. For example in other areas, the maximum income
limit in Norwalk, Connecticut is $95,000, which covers many
home buyers.
What should someone
interested in the ACORN program do to get started?
For more information about ACORN programs in
a particular area, consumers can
register with us !
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