How to Get Help With Your Down Payment on a New Home

 Are you in the process of looking for a new home, but you aren’t sure how to financially make it happen? Not all of us have enough cash at our disposal for a down payment on a home. Did you know that home buyers can apply for down payment assistance through state and local programs? There are also grants and forgivable loans available. Many states and counties provide grants and no-interest loans to help buyers pay for down payments and closing costs.

Who qualifies for assistance with a down payment?

Are you wondering if you qualify for assistance with your down payment? There are a few requirements typically in place:

• Use some of your own money toward the purchase
• Buy a home that is below the maximum home purchase price, which is a percentage of your area’s median home purchase price
• Generally, you will need to be a low-moderate income resident. Your income must be below a certain income limit.
• You are buying within an approved location
• Sometimes you will be required to take a home-buyer education course

Often, these programs are geared toward first-time home buyers, but 38% of people that have utilized this assistance are repeat buyers, so it’s not exclusive. If you’ve owned a home before you still may qualify. There are often local programs that will help with your down payment for certain groups as well, such as teachers, emergency responders, police officers or city employees to help them get into a home.

How does payment assistance work?

So, how exactly does help with your down payment work anyway? State housing finance agencies as well as cities, counties, nonprofits, and some employers are the usual source of this assistance. Many times, these programs are offered in combination with certain mortgages geared toward first-time home buyers. The type of assistance varies based upon the program. Some common types of assistance are:

• Low-interest loans – These loans make homeownership attainable by spreading the down payment and closing costs over multiple years.
• Zero-interest, deferred-payment loans – Usually this means no payments on the down-payment and closing-costs are due until the home is sold, the mortgage is refinanced or the mortgage reaches the end of the term
• Zero-interest, forgivable loans – These are forgiven after a certain period of time, such as five years. The money will not have to be repaid if the borrower still owns and lives in the home after the period of time has lapsed.

How do I find a down payment assistance program?

If you’re looking to take advantage of this program you can look in several places:

• Down Payment Resource is a company that helps you find home buyer programs in your area.
• City and county governments – Check your city and county to see if they offer assistance or programs to boost homeownership.
• State housing finance authority – Check your state for programs where you live
• S. Department of Housing and Urban Development (HUD) – select your state on their homebuying programs page and see a list of programs.
• HUD-approved housing counselors – Check the Consumer Financial Protection Bureau for a counselor in your area.

Getting help with your down payment and buying your dream home is now more accessible than ever with assistance and programs such as these. If you have any questions, we would be happy to help. Give Brooke Stiltner a call @ 907-244-6742.