Using a Grant to purchase my first REO ?

[Michael Dunn]

I guess it's a grant. I live in MS, and there is a Loan called " Home Loan Plus " that is supposedly for MS residents only and that will give you $15,000 on the front end, but it can only be applied to the Purchase of the property ( you can use it towards the downpayment of the property, towards Closing, etc... ) The kicker is, you have to live in the house for 5 years to have that $15,000 be free and clear. Meaning, lets say you sell the property after you've lived there for 3 years. And you have 2 of the 5 years remaining. You would have to pay back $6,000 out of the $15,000 . My thinking is.... If I use this loan and use it to put a 10 - 15% downpayment on a property , plus use it If I need to , to pay for any closing costs, I am basically going to be able to get a nicer house ( since I don't have the cash reserves to put 10 - 12% down ) and after the 1 year O.O. rule is up, I could rent the house out for the next 4 years, thus having my mortgage payed for, and getting cash flow as well. After 5 years, the $15,000 is free and clear and I could sell the house if I wanted to, and not have to pay back any of that money. What are fellow BP members thoughts on this please? Thanks - Michael

[John Moore]

If you have to live in the house for 5 years, how do you get to rent it out prior to that time? You might be better off staying in the house for 5 years and look upon the grant as an excellent start as you already have equity in your home. Just an opinion.