If you dream of owning a house but can’t afford the down payment needed to get a home loan, you’ll be happy to know there are state and local assistance programs to help make homeownership a reality for you. A large number of grants and loans are available to help cover down payments and closing costs for first-time homebuyers across the country. Learn more about them as you take your first steps in the exciting journey to homeownership. Show
What is down-payment assistance?Local and state finance agencies offer most of the down payment aid available for first-time homebuyers. Combined with mortgages, these programs aim to make housing more affordable. These are some options available:
How to qualifyThere are many programs and options available to help you afford the down payment on your new home. While most of these programs are meant to support first-time homebuyers, don’t let previous homeownership discourage you. If you haven’t owned a home in the past three years, you may still qualify for some programs. You can also qualify for targeted programs. These programs are designed to help valuable workers such as firefighters, police officers, teachers and active-duty servicemembers buy homes. Your eligibility depends on a variety of factors. While each program has different eligibility requirements, these are some of the elements that determine how much help you can receive and on what terms:
Assistance programs cannot finance the down payment of rental or investment properties. This type of assistance is only for buyers who will live in their new property. How to get down-payment assistanceThere are programs available in different states. Each program requires its own application forms and process. By working with a local real estate professional, you can gain insight and understanding on local programs offered by your city and county. You can also apply for a mortgage with a lender who works with down payment assistance programs. Once approved for assistance, program issuers send the funds to the lender at closing. What happens if you qualify?Down payment assistance programs can be a great option to help you become a homeowner when you don’t have the funds readily available to cover a down payment. If you qualify, it’s important to review the mortgage interest rates offered with these programs. At times, these rates can be higher and could result in a more expensive mortgage with a higher monthly payment. If that is the case, you’ll have to evaluate your options and decide what’s best for you. Some buyers who find themselves in this situation choose to delay their home purchase. When buyers save for the down payment on their own, they often get a better mortgage interest rate independent from down payment assistance programs. This can result in long-term savings for the homeowner. On the other hand, there are buyers who qualify for down payment assistance programs and choose to accept the higher mortgage interest rates. This allows them to purchase a home sooner while they benefit from lower out-of-pocket expenses in the short run. Alternatives to down payment assistance programsThere are buyers who don’t qualify for down payment assistance programs but still require help to cover the initial costs of homeownership. If you find yourself in that situation, there are alternatives to get the help you need. Some of these include:
There are a variety of affordable loan programs that can help you with your down payment or closing costs. Contact a Home Lending Advisor today for more information on affordable lending and available assistance programs. How can I get money for a down payment?5 ways to borrow money for a down payment. Take out a HELOC or home equity loan. ... . Get a loan from a friend of family member. ... . Tap your retirement savings. ... . Get a bridge loan. ... . Explore down payment assistance programs.. How can I get approved for no money down?There are currently two types of government-sponsored loans that allow you to buy a home without a down payment: VA loans and USDA loans. Each loan has a very specific set of criteria you need to meet in order to qualify for a zero-down mortgage.
Can you use grants for downpayment?These grants can be used to offset the purchase price of the flat and reduce the mortgage loan for the flat purchase. However, the grant(s) cannot be used for the minimum cash downpayment (if any) and monthly mortgage instalment payments.
How much grant can I get from HDB?First-timer families may qualify for an EHG of up to $80,000, while a couple comprising a first-timer and second-timer may qualify for an EHG (Singles) of up to $40,000. If you are buying a resale flat, you must first qualify for the CPF Housing Grants for resale flats (Families or Singles) before applying for the EHG.
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