Key Takeaways:
- For homebuyers, attaining the down payment can be one of the biggest obstacles to overcome.
- Down payment assistance programs are designed to help!
- The experts at Linda Craft and Team are here to help guide you through the process.
Whether you’re a first-time homebuyer or have owned homes in the past, lower down payment programs are making homeownership more affordable. In some cases, you might even be able to purchase a home with zero down!
How much down payment you’ll need depends on your loan. While there are benefits to putting down the traditional 20% or more, it may not be required. For many first-time homebuyers, this means the idea of buying their own house is within reach sooner than they think.
A down payment can be challenging, which is why there’s help.
Saving for a down payment can feel daunting for many homebuyers, especially in today’s hot housing market. When asked what their most challenging step in purchasing a home is, some buyers report that saving for a down payment is one of their most difficult steps to homeownership. Data from the National Association of Realtors (NAR) shows that 29% said saving for a downpayment was the most challenging step.
If saving for a down payment is your biggest obstacle, the good news is that many programs are available to help you achieve your goals. The key is knowing where to look and learning what options are available.
No matter where you are in your journey, options are available to help you achieve your dream of homeownership. Most importantly, you don’t have to be a first-time buyer. Over 38% of all programs are for repeat homebuyers who have owned a home in the last three years.
What are down payment assistance programs?
When purchasing a home, you will usually have to place a down payment equal to a percentage of your home’s final purchase price. The amount you’ll need will vary, with some mortgage programs requiring no down payment. While there are variations, coming up with this cash is often a difficult hurdle for many buyers.
Down payment assistance comes in grants, loans, and other programs. Typically reserved for first-time homebuyers only, various federal, local, or state housing authorities or nonprofit organizations offer assistance.
How much you’re awarded differs depending on the program. For example, some programs offer a percentage based on the home’s sale price, while others cap assistance at a specific dollar amount. When looking for programs to apply for, research their requirements, whether a grant or loan, and how much assistance you can receive.
Types of down payment assistance include:
- Grants
- FHA Loans
- VA Home Loans
- Forgivable loans
- Deferred-payment loans
- Low-interest loans
- Matched savings programs
How do I get started?
An application is typically needed, and sometimes you’re also required to attend training or homebuyer education on the mortgage process and maintaining finances. Eligibility is determined by your household income, debt to income ratio, credit history and varies by state and program.
The two most common requirements you need to meet are a minimum credit score of 620 or higher and income that meets the program’s requirements.
Other standard requirements may include:
- That the home is in a specific locale or county.
- That you must be a first-time homebuyer.
- That you attend a class on home buying and finances.
- That you live in the home for a certain number of years (often 3 – 10 years).
First, research what programs are available in your area. HUD has a list of local home buying programs by state. You can also search your city and state websites for information on how to apply. Then, reach out to them via email or phone for specific answers you can’t find online. Next, make sure your mortgage lender works with the program.
Contact Us Today!
Even in a historic market, you can make your dreams of homeownership a reality with the right team by your side. Rely on the experienced agents that know the area and the entire process. Contact Linda Craft & Team today at 919.235.0007 to make your biggest move yet.