How To Find Down Payment Can Help Foot The Bill A Home

How To Find Down Payment Can Help Foot The Bill A Home


How Down Payment Assistance Can Help You Foot the Bill for a Home

By
Cathie Ericson

Down payment assistance; money swirling around woman's head

maurusone/iStock

House-hunting bummer: You’ve found the perfect home, and you’ll have no trouble covering your monthly mortgage and bills—but that 20% down payment is woefully out of reach. Could that mean you’re out of luck?

Not quite. That’s because there are 2,290 down payment programs across the country that can help—that is, as long as you meet eligibility requirements in terms of income, occupation, or credit. Yet many home buyers don’t even think about applying for down payment assistance, because they’re not aware of these programs or they assume they don’t qualify.

“Consumers do not know about these programs, and those that do assume it’s more difficult to get than it is,” said Jonathan Smoke, chief economist of realtor.com®. Read on to make sure you don’t miss out.

How much money can down payment assistance provide?

One study found that buyers who use down payment assistance programs save an average of $17,766. To reach this figure, these buyers save an average of $5,965 upfront at the down payment stage. Because this also lowers the amount of money they owe their lender, it means they save on average an additional $11,801 in monthly house payments over the life of the loan.

How can you find out if you qualify for down payment assistance?

While many down payment assistance programs are geared toward low-income home buyers, you don’t have to be destitute. Plenty of programs are geared to middle-income buyers as well. Yet a survey by NeighborWorks America found that 40% of respondents hadn’t received any information about down payment assistance programs for middle-income homebuyers, which could have saved them a bundle

Part of the reason for the confusion might be because the programs are fragmented.

“Down payment assistance can come from many different sources, including the federal government, counties, and local communities,” says Chantay Bridges with TruLine Realty in Los Angeles.

There will be a list of qualifying factors, Bridges cautions, but a number of programs are available, including FHA and VA. Homes that are part of a Neighborhood Stabilization Program often qualify, as do homes purchased by teachers, firefighters, and other civic employees under certain programs. Many counties also offer down payment assistance to first-time buyers, who are defined as anyone who hasn’t owned a home in three years.

How to find down payment assistance programs near you

A great place to start is Down Payment Resource, which offers a handy calculator that can show you what you may be eligible for. Many multiple listing services nationwide display a special icon on the listing of a property that might qualify for down payment assistance.

Many options are also listed by state, or you can check your state on the Department of Housing and Urban Development website.

Also check with your agent and lender for programs available in your specific county, because they change frequently—and these professionals should be up on the latest options.

 

Cathie Ericson writes about real estate, finance, and health. She lives in Portland, OR, where you can find her writing, reading, hiking, running, or wrangling her three boys.

 Follow @CathieEricson



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Dated: September 26th 2016
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