How old do you want to be when you buy your first home? Depending on where you live, statistics say you may be well past retirement until you’re able to save for the 20% down payment that most loans require. Assuming you’d rather move into a home before that, you may want to look into a down payment assistance program.
Since the 1960s, the price of homes has increased by 113%. Rent is even worse at 172% increase, according to Business Insider. Numbers will just continue to rise, too. It’s no wonder that millennials are waiting to buy their first home. In fact, Housing Wire states that to purchase a median-priced home on a median income in the US, you’ve got to save up for 14 years. If you live on one of the coasts, you’re looking at around 40 years.
This is where down payment assistance programs along with the right loan product can help.
Down payment assistance programs are state/city/county-backed loan assistance that help homebuyers purchase their homes by offering some or all of their down payment.
Every state has their own DPA program, and they can even be city or county specific. It’s important to do your research and look into what programs your area provides. You should also keep in mind that lenders do not always offer every single DPA – so research your lender, too. Each DPA program is a little different, and they have different eligibility requirements. A majority of them have a few requirements in common, which we’ll discuss later.
There are four main types of DPA programs.
Whichever DPA you apply for, you’ll be saving money. Either you receive free money from a grant or forgivable loan, or you’re putting a larger down payment on your home and saving money on your monthly payment.
DPA programs come in many shapes and sizes. Whether or not you think you qualify for a DPA, it’s a good idea to look through your area’s eligibility prior to buying your home. You can view those here. There are DPA programs for veterans, recent graduates, first-time homebuyers, teachers, first-responders, and more. Each of these requires different things, but most of the DPA programs have a few requirements in common:
If you qualify for a DPA, you likely also qualify for mortgage loans that offer a lower down payment. Usually, that mortgage loan can be borrowed along with the DPA. Plus, some states offer tax credits for homebuyers, saving you even more money.
DPA programs aren’t for everyone, and they aren’t offered at every mortgage lender. It’s important to do your research on the topic, and the lender, in order to benefit from these programs. After speaking with a qualified lender, like Ruoff Mortgage, you can decide if a DPA makes sense for you.
If your homeownership dreams include buying a home before you retire, it’s a good idea to look through the down payment assistance programs available to you. Your dreams out aren’t of reach!
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