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: