Mortgage assistance programs make it possible for many home buyers to purchase a house with little or no down payment. To make use of these programs, home buyers must understand which programs are available in their area and qualification requirements for each.
Home Ownership can be a Reality
The down payment required to purchase a house has delayed and even prevented many from fulfilling their dreams of homeownership. Conventional lenders typically require a down payment of 20 percent, a significant obstacle for families on limited budgets.
Fortunately, there are approximately 2,500 federal, state and local home purchase assistance programs across the country. About 69 percentof these programs offer mortgage down payment assistance to qualified applicants, making homeownership a reality for many.
Available Down Payment Assistance Programs
Down payment assistance programs can eliminate or substantially reduce the down payment required to qualify for a mortgage. They take many forms and are available from a variety of agencies, including:
- Federal Housing Authority (FHA) Loans – Require a 3.5 percent down payment
- Veterans Administration (VA) Loans – Qualifying service members and veterans can borrow money to purchase a home with no down payment
- Neighborhood Housing Services of Chicago – Offers up to $15,000 in down payment and closing cost assistance and up to $17,500 for public servants like police, fire department, emergency responders, teachers and veterans
- National Home Buyers Fund – Offers forgivable down payment loans and grants
- Home Purchase Assistance Program – Provides down payment assistance loans that are deferred for a period of time after closing
Down payment assistance programs each have specific eligibility requirements. To understand which may be right, prospective buyers should thoroughly research each program. Working with a real estate professional such as a mortgage broker or real estate attorneycan simplify the research and may offer additional options for down payment assistance.
Equity and Home Ownership Now Rather than Later
By eliminating or reducing the required down payment, home buyers may be able to qualify for a mortgagewithout waiting years while saving enough for a down payment. The time invested in researching and finding the assistance program that meets their needs and budget can pay dividends in the long run, allowing them to build equity in their property as they enjoy homeownership now rather than later.
