Saving for a down payment is one of the biggest obstacles facing every homebuyer. It’s not just young and first-time homebuyers. It’s anyone who might be able to afford the monthly mortgage payment but find the upfront costs too high or too restrictive. If you’re having trouble saving up, there are still plenty of options to help you cover the initial costs and qualify for an affordable loan.
What are Down Payment Assistance Programs?
Between gift funds from family members, down payment loans, grants, and tax credits, there are plenty of down payment assistance options for all homebuyers. In many cases, you can even combine them to help lower your initial costs and ensure that your future payments stay affordable.
Some states offer grant programs for first-time homebuyers, low-to-moderate income individuals, and families. Down payment grants don’t need to be paid back, so you don’t have to worry about additional monthly payments.
Low Down Payment Loans
You don’t need to put 20 percent down to buy a home. There are loan programs available that don’t require out-of-pocket payments upfront. Some states also offer government-sponsored programs to make low down payment programs even more affordable.
Down Payment Loans & Tax Credits
You can often add a down payment loan on top of the primary home loan to help cover upfront cost. Many states also offer tax credit programs to provide homebuyers with additional financial incentives.
Down Payment Assistance Programs Overview:
- Programs may have income and/or location restrictions.
- State-sponsored programs vary and are unique to each state.
- Homebuyers may be required to take homeowner education classes.
- Some assistance options may be combined in a single purchase.
- Allows for more affordable options within FHA, Conventional, USDA, and VA loans.
- Deferred payment options allow you to pay back the assistance funds without interest when you sell or refinance your home.
- Monthly payback options incur interest and require you to pay back the assistance funds over time.