Purchasing a home can be one of the most important (and amazing) decisions of your life, but it can also prove to be one of the most arduous as well. Many people spend decades working diligently and saving meticulously for this ultimate goal. Everyone knows that the process of achieving this monumental accomplishment may become tedious and difficult at times, and down payments and other hefty costs can seem overwhelming and discouraging; however, most people are unaware that there is actually an abundance of help available right now, waiting to be utilized and enjoyed.
First-time home buyers are usually surprised (and relieved) to learn that there are currently over 2,000 programs available in America that have been created solely to assist home buyers with their down payments. Most people have no clue that such a vast range of assistance options even exists, let alone just how simple it is to apply and get approved for these incredible benefits.
How Down Payment Assistance Plans Work
These types of programs are usually run by local and state governments and nonprofit organizations. There are typically four main types of assistance options you can receive – grants, loans, deferred loans, and forgivable loans. Direct grants are gifted and do not require repayment of any kind. No or low-interest loans can include second mortgages that need to be paid in addition to main mortgage payments, whereas deferred loans only need to be paid if and when you refinance or sell the house or if you move. Forgivable loans only need repayment when you refinance, sell, or move as well but are forgiven over a determined number of years. The average span is five years but can range from five up to 15 or 20.
The eligibility requirements for assistance differ depending upon the state and specific program. However, most require candidates to be first-time homeowners (which means they must not have owned a home in at least three years) with average to good or better credit scores and low to moderate incomes.
How to Find Down Payment Assistance
Most programs and assistance plans are operated locally and can be found easily by researching the resources in your town or city. Your loan officer or broker should have a list of helpful options, and you can also find information and assistance opportunities offered by each state on the United States Department of Housing and Urban Development (HUD) website. If you are a first-time homebuyer with decent credit and an average income, you can check your eligibility for down payment assistance quickly and easily right now.