Affording a down payment on a home can be a major hurdle in the homebuying process, but luckily, there are down payment assistance options to help. With a down payment assistance program, first time homebuyers can get better mortgage terms and afford the house of their dreams.
Here is the most important info about these assistance programs for buyers to know:
How do down payment assistance programs work?
Down payment assistance programs are provided by a variety of institutions, including local government agencies and nonprofits. If you're eligible - decided based on household income, credit history and other factors depending on state - you can either receive a grant or special type of loan to pay for your down payment.
What are the different types of down payment assistance?
There are several types of assistance programs to help new buyers with a down payment:
- Grants
- Forgivable loans
- Deferred-payment loans
- Low-interest loans
- Matched saving accounts
Grant programs offer monetary assistance without expectation of repayment. Other programs like forgivable loans or low-interest loans can serve as affordable second mortgages to cover the cost.
Who is eligible for assistance?
Eligibility requirements for down payment assistance programs depend on the individual program. Generally, you need a good credit score and a stable debt to income ratio. Some other requirements include:
- The home must be in a specific location or county.
- You must live in the home for a minimum amount of time (usually 3 to 10 years).
- You have to be a first-time homebuyer.
- You have to take a homebuyer education class.
How to apply for down payment assistance
The availability of down payment assistance is different in every area of the country. Check online or with a loan officer for eligibility requirements, applications and details.
Should you consider applying for a down payment grant or other assistance program? Remember these key points when factoring the option into your financial decisions.
About the Author
Leona "Kay" Lehmer
I have been in the real estate industry for over 25 years! I started working with some of the top builders in Tampa and then decided to pursue my general real estate license. I love working with people and helping them find the home of their dreams. The TampaBay Metro area(Tampa, St Petersburg, Clearwater...)is a great City and has grown unbelievably in the past 25+years. I have extensive knowledge that I can share for those coming to the Florida area or those who want to move up or downsize or have to leave our great state. I make it my goal to work for you to find the right home, whether it be upsizing or downsizing, I will find the best location for you! From the beaches to golf course to the city or country, I can find the perfect home for you! When you call my phone, you get ME! You are not handed off, if I don't know the answer to a question, I will find out and get back to you! I Work FOR YOU!!
