Available programs and how to apply

Who can benefit from assistance for the payment of a deposit?

Many first-time home buyers are eligible for down payment assistance, especially those with low and modest income. There are several programs that can help military and veterans, as well as some public service employees.

The majority of down payment assistance programs set income limits for households. These programs are designed to help people with low and modest incomes. The income limit depends on the program, the median income where you live and the size of your family.

Additionally, most programs are limited to first-time home buyers who will be living in the home as their primary residence. To be a first-time home buyer, you cannot have owned or co-owned residential real estate in the past three years. If you own another home, even if you don’t live there, you are unlikely to be considered a first-time buyer.

Eligibility requirements vary by program, but often include:

  • Be in the military (or a veteran)
  • Be a civil servant
  • Completion of a training program for home buyers
  • A minimum credit score of 640
  • Your debt-to-income ratio
  • Location (such as rural areas or specific towns and counties)

Keep in mind that you will still need to qualify for a mortgage with a mortgage lender. Read our first-time homebuyer’s guide to learn more about the home buying process. Even if you get help with your down payment, mortgage lenders will want to see money in your savings. Some lenders require reserves of a month or more. You are not likely to qualify if you have zero dollars in the bank. One of the benefits of CCA is that it allows you to save your money for the inevitable expenses of homeownership rather than using it for a down payment.

Which mortgage can you apply for down payment assistance?

Down payment assistance programs are generally designed to work with low down payment home loans. This makes sense since the down payment assistance is often equal to the minimum down payment required for one of these loans. The administrator of the PAD program you choose can tell you which lender or loan will work for you.

How to request assistance with the payment of a deposit

To apply for down payment assistance, your main task is to find the programs that are available to you.

Down payment assistance programs can be hard to find. You may need to search to find options in your area. There may be overlapping assistance programs in areas served by lenders, government agencies, and non-profit organizations.

Here’s a good place to start:

You can also contact the Housing Finance Authority in your state.

If you are affiliated with the military, search for “military down payment grant” to find banks and private organizations offering down payment assistance.

Be persistent in your research. Private programs may not be listed on federal or state government websites. For example, the National Homebuyers Fund and the Chenoa Fund are available nationwide. The Chenoa Fund offers down payment assistance programs with no income restrictions. Borrowers who don’t meet the income threshold can get a 0% 10-year loan to cover their down payment.

Once you find a program, you might be asked to apply to a participating lender. If you are given a list of lenders, it is a good idea to request it from a few so that you can compare offers. Be sure to confirm that each loan officer is familiar with the DPA programs you are considering. Even the best lenders for first-time home buyers may ignore how PAD programs work.

About Matthew R. Dailey

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