Down Payment Assistance Program Benefits

Who has the benefits? Everybody! Sellers now have a better chance of selling their homes faster, and at full asking price. More qualified buyers equal less time on the market. Less time on the market equals savings of interest and expenses. Buyers can buy now at today's prices instead of expected higher prices in the future. Lenders, realtors and builders benefit by having new marketing strategies which create more business and help more people own more homes. It's a win-win situation for all. Down payment assistance is probably the best program available today.

Down payment assistance is a great resource to help first time home buyers get into a home sooner. One of the biggest challenges facing first time home buyers is coming up with enough money for a down payment. If paying for a down payment and closing costs have kept you from getting into a home of your own, down payment assistance may be able to help. Eligible borrowers can use down payment assistance to greatly reduce the out-of-pocket expenses associated with buying a home. Depending on the program you may need to able to qualify for an FHA mortgage and have some money of your own for a down payment.

Down payment assistance programs generally offer $10,000 or more to eligible low-income families which can be used for down payment or closing costs. Program advantages may vary from program to program and they are typically secured by a second mortgage. Some of these second mortgages may be "silent" meaning there is no payments required and some of the programs forgive the loan after living in the home a certain amount of time. These programs provide either low-interest or no-interest loans for qualified first time homebuyers to cover their down payment or closing costs, and are considered to be “junior” loans (2nd mortgages). Borrowers are not required to make monthly payments on the 2nd lien deferred forgivable loan; however, if they sell, refinance, transfer or otherwise dispose of or cease to occupy the residence within a certain time period after the residence is purchased, the borrower will be responsible for the repayment of the full amount of the assistance that has not been forgiven. This zero interest grant is paid upon the refinance or sale of the property. Check out the down payment options at your local mortgage lender to learn about grant options that may be available. Remember, many down payment assistance grants or loans are only available for a limited time only.

Below are some of the benefits of Down Payment Assistance Programs:

Forgivable loan. No need to pay the money back that you get as a grant from the program if you keep the mortgage and home for minimum number of months.

No downpayment. You may be able to purchase a home with only 0% down payment if you can qualify for the down payment assistance program.

Multiple dwelling types up through a 4 unit residential. You may have to live in the property for a designated period of time.

Many of the loan programs are from FHA fixed interest rate programs and you can count on the monthly mortgage payment to remain the same through the time that you have the mortgage. The only exception that will change your mortgage payment is if your real estate taxes and or homeowners insurance changes, so it's easy to budget housing expense.

Down payment assistance may be used towards closing costs and to buy down interest rate.

Applying is really quite easy and available in most areas.

Generally, purchasers do not have to be first time home buyers.

Homeownership counseling is also provided.

Alternative to a high interest rate sub-prime loan.

Flexible credit guidelines and less than perfect credit and credit scores down to 620 are allowed on many down payment assistance programs.

Sellers can market their properties to more potential buyers.

Homes can sell faster than properties that require a down payment.

Some down payment assistance information may not be so clear to the average new home buyer, which is why it’s a good idea to work with a loan officer and real estate agent who can help educate you on the home buying process and terms you’ll need to know.