While Down Payment Bonds are hardly new, they have not been widely used through North america until recently. Since there are many that are unfamiliar with this tool, we've put together some common questions with answers regarding Down payment Options.

1. Facts About Down Payment Options

2. Procuring a Down Payment Bond
DPO is a privately owned company
Who is DPO? founded in the United States in 2011. Its
primary focus is providing Down
payment Bonds for property purchases.
DPO is a first full-service down payment
bonding company in the United States.
DPO is an MGA of QBE the Americas.

3. Procuring a Down Payment Bond
A down payment bond is a new
What is a financial alternative for the deposit or
down payment required on real estate
Down purchases. A down payment bond can
Payment be used for all or part of the
transaction’s required deposit amounts,
Bond? for as much as 20 percent of the
purchase price, and can be issued for a
minimum period of 3 months to 36
months.

4. Procuring a Down Payment Bond
Are Down No. Down payment bonds have been
used successfully in many other
Payment countries including Australia and New
Zealand for more than 10 years. The
Bonds a New Down Payment bond product is
Product? relatively new to the United States.

5. Procuring a Down Payment Bond
Why use a With a down payment bond, there is no
need to use cash for the required down
Down payment when purchasing a property.
Buyers using down payment bonds do
Payment not need to withdraw cash from their
Bond? savings or investments, or obtain
financing by using equity in another
property. A down payment bond is also
less expensive than traditional real
estate financing.

6. Procuring a Down Payment Bond
Are Down Yes. All DPO down payment bonds are
underwritten by QBE Specialty Insurance
Payment Company, a part of the QBE Insurance
Group Limited (QBE).
Bonds
insured?

7. Procuring a Down Payment Bond
Who is QBE QBE Insurance Group Limited is one of
the top 25 insurers and reinsurers
Insurance worldwide with operations in all key
global insurance markets. QBE is an
Group? Australian listed company with a Group
Head office based in Sydney, and has
operations in 49 countries with over
13,500 staff worldwide. Rated "A"
(Excellent) by A.M. Best and "A+" by
Standard and Poor's.

8. Procuring a Down Payment Bond
What is the Down payment bonds replace the
requirement to outlay a cash deposit,
Benefit to the allowing buyers to keep their money
working for them right up until closing.
Buyer? Then, at closing, they pay the property’s
full purchase price.

9. Procuring a Down Payment Bond
What is the An approved down payment bond
assures sellers and developers that
Benefit to the buyers have been pre-qualified as
having the financial capability to
Seller or complete the transaction. If the buyer
does not close the property transaction,
Developer? QBE pays the seller the full amount of the
down payment bond.

10. Procuring a Down Payment Bond
What is the An approved down payment bond
assures sellers and developers that
Benefit to the buyers have been pre-qualified as
having the financial capability to
Seller or complete the transaction. If the buyer
does not close the property transaction,
Developer? QBE pays the seller the full amount of the
down payment bond.

11. Procuring a Down Payment Bond
Who can Eligible applicants must be US citizens.
Applicants can be individuals or
apply for a couples. The applicant may be an
existing property owner who wishes to
Down purchase another property or investors
who wish to expand their property
Payment portfolio.
Bond?

12. Procuring a Down Payment Bond
To qualify for a Down payment bond an
How does applicant will complete a DPO
application form and supply the
one qualify supporting information required as
noted in the application form. DPO will
for a Down then underwrite and assess the
Payment application and determine whether the
applicant has the financial capacity to
Bond? be able to complete on the new
property purchase taking into account
the applicants current overall financial
position.

13. Procuring a Down Payment Bond
For many of today’s property buyer’s, the cash
required for the deposit is often tied up in their
Why do current home or other investments. This can
mean either expensive bridging finance or
property borrowing from a finance company/bank at
high interest rates. Regardless of where the
buyers like finance is obtained, interest charges,
establishment fees and other up-front costs
Down connected with the loan can be expensive and
time-consuming to arrange. For buyers that do
Payment have the cash available for the deposit, they
would prefer to tie up a small portion of this,
Bonds? rather than the full deposit amount. This allows
their deposit money to continue working for
them, right up until closing when they pay the
full purchase price.

14. Procuring a Down Payment Bond
Is a Down Yes. For example, a 12-month Down Payment
Bond representing a $60,000 deposit would
Payment Bond cost a once only fee of approximately $2,700,
(plus applicable taxes and fees). On the other
cheaper than hand, short-term finance for $60,000 could
cost: An application fee (say 1.0% of the
other Deposit amount to be borrowed) = $600, plus Interest
payable (assuming interest rate of 6.5%) =
Financing $3,900. The total cost of bridging finance in
this example is $6,500. In this simple example a
Options? Down Payment Bond is considerably cheaper
than other financing methods, plus far more
convenient to organize.

15. Procuring a Down Payment Bond
The Down Payment Bond is a legal
Will the seller document and it is at the sole discretion
of the seller to accept a Down Payment
accept my Bond. Given the many benefits of Down
Payment Bonds to sellers and the fact
Down that our Down Payment Bonds are
backed by QBE Insurance, many sellers
Payment (and their financiers) will accept a Down
Bond? Payment Options Down Payment Bond
as an acceptable way of buying a
property.

16. Procuring a Down Payment Bond
It may, if not already included. If there is
Does the no reference to Down Payment Bonds in
the Purchase and Sale agreement, it is
Purchase recommended to ask the seller to
include the acceptance of Down
and Sale Payment Bonds in the Purchase and
agreement Sale agreement. This reference should
be put in the deposit/earnest deposit
need to be section or can be a separate
addendum to the contract. Down
ammended? Payment Options can provide you or the
seller with the wording for this, if
required.

17. Procuring a Down Payment Bond
Down Payment Option’s Down Payment
What is the Bonds are issued on the understanding
that you (the buyer) will pay the seller
Indemnity the Down Payment Bond amount on the
closing date of the contract (as you will
Agreement pay the full purchase price of the
that is property). The Indemnity Agreement is a
legally binding right you give to QBE
included in the Insurance to pursue recovery against
you for any part of the Down Payment
Application Bond amount that must be paid to the
seller by QBE if you default under the
Form? Purchase and Sale agreement.

18. Procuring a Down Payment Bond
If you default under the Purchase and
What happens Sale agreement, the seller is entitled to
retain the Down Payment Bond amount.
if I default The seller can claim this amount from
QBE Insurance. This amount will be paid
under the to the seller nominated in the
Purchase and agreement after QBE Insurance is
provided with the request for payment
Sale and notice of termination of the
Purchase and Sale agreement. QBE
agreement? Insurance will then seek recovery from
the buyer via the Indemnity Agreement,
which is signed by you as part of the
application form.

19. Procuring a Down Payment Bond
The Down Payment Bond expires when
one of the following occurs: - The expiry
When does the date as noted on the Down Payment
Down Payment Bond passes; - The Purchase and Sale
agreement is completed (closed),
Bond expire? terminated or rescinded; or - When a
claim is paid by QBE Insurance

20. Procuring a Down Payment Bond
It depends on the circumstances. If you
return the unused, original Down
Can I obtain a Payment Bond Certificate to us within 30
days of issue, the premium will be
refund after the refunded. An administration fee will be
Down Payment deducted and the balance will be
refunded to you. If the development you
Bond has been are buying in does not “break ground”,
then we will refund you the premium to
issued? you on a pro-rata basis based on the
time that the seller has held the Down
Payment Bond. An administration fee will
also be deducted.

21. Procuring a Down Payment Bond
If a purchaser does not complete their purchase, the
seller can make a claim directly to Down Payment
As a seller, how Options, by providing the following documents: - A
letter from the seller/seller’s attorney to Down
do I make a Payment Options demanding payment of the Down
Payment Bond and stating the reason why. This letter
claim when my must state that the purchaser has not completed their
purchase obligation under the purchase
buyer has agreement/contract and that the seller has not been
paid the deposit by the purchaser; - A copy of the
defaulted on notice from the seller to the purchaser, where the
seller has cancelled/terminated the purchase
closing?
agreement/contract due to the purchaser not
meeting their obligation, entitling the Vendor to retain
the deposit; and - The original Down Payment Bond.

22. Connect with Us!
Down Payment Options
410 S. Rampart Boulevard
Suite #390
Las Vegas, NV 89145
Tel. 1.702.726.6818
info@downpaymentoptions.com
www.downpaymentoptions.com