There are many people that probably earn more than enough to make monthly mortgage payments and be responsible home owners but they are having problems coming up with a down payment. There are thousands of programs across the country that make money available for qualified households to put towards the down payment. These programs are not just for low income households, in fact they are often for households that earn a decent amount of money too.
If you are paying for rent, coming up with a down payment is usually one of the biggest obstacles to home ownership, so the purpose of the Down Payment Assistance Programs is to overcome that barrier for otherwise credit worthy home buyers. The dollar amount is sometimes a fixed amount or is sometimes based on a percentage of the sale price or loan amount, and some programs can be layered together to create more help. Some are grants that are forgiven from day one or with the condition to stay in the home for a certain number of years, and some are soft second mortgages that have to be paid back after a certain amount of time.
Typically, all the programs have household income limits, sales price limits, and almost all require that the homebuyers complete a pre-purchase certification program, usually 6 to 8 hours long that can be done online or in a classroom. It requires that the homebuyer actually lives in the property, it is not for investment properties. Most times it also requires that the buyers use a qualifying lender and many times the properties must also qualify, meaning they have to be in livable conditions and do not need excessive repairs so that the owner would have to dip into his mortgage payments to pay for those repairs. Because every area is unique, every program is unique.
You can learn about your local programs talking to your realtor or lender. Another way for you to easily access all the programs available in your area is to go to Downpaymentresource.com and click on “Find Down Payment Programs”. That will take you to an online form that you can fill out. When you submit the form, results will show all the programs available in your area based on the amount of money you make, the price of the home you’re looking for, and so on.