One of the biggest hurdles buyers face is saving enough money to purchase a home. Here’s the good news – there are numerous programs designed to lower the costs of homeownership! Even though assistance programs are readily available, finding the best options still takes time and requires you to do your research. If this is your first time searching for help paying for a home, follow these steps to make finding homebuyer’s assistance programs a snap.
Learn the Differences
There are many types of homeownership assistance available to you. In some cases, you can even combine some of them. But before you can start comparing options, it’s best to know the key differences between some of the most common types of homebuyer’s assistance programs.
Many buyers assume they can’t buy a house unless they have a 20 percent down payment and a perfect credit score. But some national mortgage programs, like those offered by Fannie Mae and Freddie Mac, have lower requirements. This could allow your down payment to be as low as three percent of the purchase price!
However, it’s important to remember that low down payment mortgage programs usually add private mortgage insurance (PMI) to your monthly payment. It’s always best to calculate your potential savings to see if one of these mortgage programs makes sense for you.
Down Payment Assistance (DPA) Programs
These homebuyer’s assistance programs make it much easier for you to save up for a down payment on a home. The financial assistance you receive is often in the form of a grant (a gift that never needs to be repaid) or a low-cost loan (such as a second mortgage on your property). DPAs can also be deferred or forgivable loans, making it less stressful to pay them off after closing on your house.
Closing Cost Assistance Programs
While it’s easy to only focus on the down payment for your home, there are also other costs to consider. Professional fees and other charges that comes with closing a home can quickly add up. But there are homebuyer’s assistance programs that can help you with these expenses too. Often, this aid is included in DPA programs and offered as a grant, a forgivable loan, or a low- or zero-interest loan.
See if You Qualify
Now that you know the differences between the main homebuyer’s assistance programs, it’s time to see if you qualify for them. Many programs have specific requirements and limitations, but since there are so many available, you’re sure to find one that works for you.
Some assistance programs are strictly limited to first-time homebuyers. However, this is defined as anyone who hasn’t been a homeowner for at least three years in most cases. So, if the last time you owned a home was over three years ago, you may still qualify for one of these programs. There are also programs that are intended to help buyers who fall below certain income thresholds. Others assist individuals who are members of specific groups, like public service workers or members of the military/veterans and their spouses. There are even programs designed to assist buyers who want to live in rural areas.
When searching for assistance, the most important thing is to explore every qualifying option you can imagine. That way, you have a better chance of finding a program that matches your situation.
Widen Your Search
Did you know that homebuyer’s assistance programs are offered by every level of government and various community and charitable organizations? It’s true – and they can help you make affording your dream home a reality. It all starts with searching high and low for the right programs.
Many different mortgage programs, like those offered by Fannie Mae, Freddie Mac, and the Veterans Administration, are available in every state. To apply, you just need to find a lender who processes these loans. If you have trouble finding one, one of our qualified agents is always happy to help.
Every state has a housing finance agency (HFA), although they have different names from state to state. To find your state’s HFA and their primary website, just go to the National Council of State Housing Agencies’
(NCSHA) list of state housing finance agencies. You can also find your statewide assistance programs simply by searching online for “homebuyer assistance programs in (state).”
Much like the state programs, just searching for “homebuyer assistance programs in (city)” can reveal more homebuyer’s assistance programs designed to make the purchase more affordable. These can include
partnerships between local governments and nonprofit groups. Just remember, the more you explore, the better your chances of finding the right program!