Down Payment Assistance for Homebuyers
Nearly 9 out of 10 U.S. homes could qualify for down payment assistance programs when homebuyers also fall within maximum income limits, according to a study
Income limits vary by market, but Down Payment Resource said 91 percent of the programs it tracks have funds available to help eligible buyers, providing $11,565 in assistance on average.
According to the analysis, at least one down payment assistance program is available in every U.S. county, and more than 2,000 counties have more than 10 down payment programs within reach of prospective buyers.
More than half of down payment programs (54 percent) take the form of low- or zero-interest second mortgages issued either by an HFA (housing finance agency) or nonprofit organization. Payments on second mortgages may be deferred or forgiven incrementally for each year the buyer remains in a home. These programs, where available, could reduce a buyers requirement for cash to lose tremendously.
Other major types of down payment assistance include first mortgage loans with below-market interest rates or 100 percent financing; mortgage credit certificates (MCCs) that provide up to $2,000 in annual tax credits for the life of a loan; and Neighborhood Stabilization Program (NSP) loans and grants earmarked for communities hard hit by the housing bust.
Many would-be homebuyers mistakenly believe that they don’t have the dough to buy their dream home because they’re unaware of down payment assistance programs. That’s particularly true for middle-income U.S. adults, 70 percent of whom are clueless about local down payment assistance that might be available to them. In fact there are more than 2000 such programs available nationwide including several here in South Florida.