What You Need To Know About Today’s Down Payment Programs

What You Need To Know About Today’s Down Payment Programs

There's no denying it's gotten more challenging to buy a home, especially with today's mortgage rates and home price appreciation. This may be one of the big reasons you’re eager to look into grants and assistance programs to see if there’s anything you qualify for that can help. Unfortunately, many homebuyers feel like they don’t know where to start.

A recent Bank of America Institute study asked prospective buyers where they lack confidence in the process and need more information. Here’s what topped the list:

53% said they need help understanding homebuying grant programs.

So, here’s some information that can help you close that gap.

What Is Down Payment Assistance?

As the Mortgage Reports explains:

“Down payment assistance (DPA) programs offer loans and grants that can cover part or all of a home buyer’s down payment and closing costs. More than 2,000 of these programs are available nationwide. . . DPA programs vary by location, but many home buyers could be in line for thousands of dollars in down payment assistance if they qualify.”

Here’s some encouraging news: in addition to these programs, you likely don’t need to save as much for your down payment as you might think. Despite common misconceptions, you usually don’t have to put down 20% unless required by your loan type or lender. This means you can save less upfront, and there are programs available to help make your down payment more manageable. It’s a win-win.

First-Time and Repeat Buyers Are Often Eligible

It’s also worth mentioning that it’s not just first-time homebuyers who are eligible for many of these programs. Whether you’re looking to buy your first house or your fifth, there could be an option for you. As Down Payment Resource notes:

“You don’t have to be a first-time buyer. Over 39% of all [homeownership] programs are for repeat homebuyers who have owned a home in the last 3 years.”

Additional Down Payment Resources That Can Help

Here are a few of the down payment assistance programs that are helping many buyers achieve their dream of homeownership, even now:

• Teacher Next Door is designed to help teachers, first responders, health providers, government employees, active-duty military personnel, and veterans reach their down payment goals.
• Fannie Mae provides down payment assistance to eligible first-time homebuyers living in majority-Latino communities.
• Freddie Mac also offers options specifically designed for homebuyers with modest credit scores and limited funds for a down payment.
• The 3By30 program outlines actionable strategies aimed at adding 3 million new Black homeowners by 2030. These programs provide valuable resources for potential buyers, facilitating easier access to down payments and helping them achieve their dream of homeownership.
• For Native Americans, Down Payment Resource identifies 42 U.S. homebuyer assistance programs across 14 states. These programs aim to ease the path to homeownership by providing support with down payments and other associated costs.

If you want more information on any of these programs, the best place to start is by contacting a trusted real estate professional. They can provide more details about what may be available, including any other programs designed to serve specific professions or communities. Even if you don’t qualify for these types of programs, they can help determine if there are any other federal, state, and local options worth exploring.

Bottom Line

Affordability remains a challenge, so if you’re planning to buy a home, it’s crucial to take advantage of all available resources.

The most effective way to explore your options is to connect with a team of real estate professionals, including a trusted lender and a local agent. They can provide valuable insights and guide you through available programs and resources to help you achieve your homeownership goals.