Don’t Let a Downpayment Get In Your Way — Ultimate Guide To Down Payment Assistance
(RepublicanDaily.org) – Buying a house is a lot more challenging than it used to be. Even if you’re working full-time alongside your partner, the prices in some in-demand areas of the country make house hunting and completing a purchase very difficult. Another aspect to the problem is the requirement for a down payment; if you don’t have any money saved, you could be waiting a while to come up with enough cash.
However, there are government down payment assistance (DPA) programs that can help.
How Does Down Payment Assistance (DPA) Work?
DPA programs come in the form of either grants or loans to help meet the cost of the down payment for a home mortgage. There are different programs available from different organizations, but most DPA schemes come from local governments.
As well as traditional loans and grants, DPA programs also come in the form of forgivable loans and deferred loans. Repayments on deferred loans only become due if the buyer moves away, sells or refinances the home. Forgivable loans, as the name implies, are forgiven after a certain period of time. This period can be as short as 5 years, or as long as 20. Like deferred loans, these become payable if you decide to vacate, sell, or refinance the property.
Who Qualifies for Down Payment Assistance?
Eligibility requirements for DPA schemes vary somewhat from one program to the next.
Some DPA programs require participants to be first-time buyers. However, that doesn’t mean anyone who has previously bought a home is ineligible; “first-time buyer” just refers to someone who hasn’t owned a home in three years in some cases. You’ll have to research the terms of different programs to see what definition applies to you.
Most DPA options also set requirements in terms of income. If your earnings are above a certain level, which will differ from one program or locale to the next, you won’t qualify. Also, many DPA programs are restricted to individuals buying a primary residence; if you want to fund the down-payment for a second home or rental property, you won’t be entitled to funding under DPA rules.
How to Find Information on Down Payment Assistance
While federal and state down payment assistance does exist, you’ll only be able to access a DPA grant or loan by working with an approved lender, so you should make contact with your local loan officer to see what type of assistance might be available in your case.
If you’re at a more basic stage in the process, you can find useful information by searching local programs in your state.
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