Purchasing a home is a momentous milestone, but many people struggle to save enough money for a down payment. Fortunately, there are state and local programs available that provide down payment assistance to eligible homebuyers.
So, who qualifies for down payment assistance? Let’s take a closer look at what Down Payment assistance programs are all about and what it takes to qualify.
What is Down Payment Assistance?
Down payment assistance is any program or funding option that makes it easier for homebuyers to get the money they need for a down payment. Government agencies and nonprofits typically offer these programs as grants, forgivable loans, or deferred-payment loans.
Grants are the most common down payment assistance program for low-income home buyers. Grants do not need to be repaid, which makes them an excellent option for those who need help covering the upfront costs of buying a home.
Forgivable loan are another type of down payment assistance program that is forgiven after a set number of years as long as you continue to live in the home. Moving, you must repay the loan before the forgiveness period ends.
How Does Down Payment Assistance Work?
To qualify for down payment assistance, you must meet specific income requirements and live in the home for a set period. Each program has its eligibility criteria, so it’s essential to speak with a knowledgable loan officer who has put these types of loans together recently, to learn more about the current available programs in your area.
Who Qualifies for Down Payment Assistance?
Most government and charity programs have strict criteria for who qualifies as a first-time homebuyer. Most federal, state, and non-profit programs will consider you a first-time homebuyer if you have not owned a property in the past three years. However, you cannot have any rental or investment property ownership and still receive first-time buyer down payment assistance, even if you didn’t use or live in the property.
If you need assistance with a down payment, contact us for guidance on finding a program in your area and how to qualify and apply.