Are you avoiding buying a house because you don’t have a down payment saved? You aren’t alone. Millions of Americans do the same thing, but there is help. There are several state and local down payment assistance programs that can make homeownership a possibility for you.
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The Types of Down Payment Assistance
Before you start searching for down payment assistance programs, you should learn what options you have:
- Loans – Some programs offer low-interest down payment loans. This gives you the money you need to put down on the home in order to secure the purchase mortgage. You will have two loans to pay in connection with your home. Each loan has its own requirements, though. Some even have deferred payments that don’t become due and payable until you sell the home.
- Grants – Some programs offer grants, which don’t need to be repaid. You receive the money because of an area that you live, income that you make, or any other criteria that you meet that the program requires.
Finding the Right Down Payment Assistance Program
There are thousands of down payment assistance programs available throughout the country. Many are specific to their state and/or locality. The best place to start your search is with HUD. Right on their website, they offer links to a variety of down payment assistance programs.
If you don’t qualify for any of those programs or you need further assistance, you should also consult with your local government. You can search for your local government online to get their contact information. You should search at the state, county, and city level because each level may have their own opportunities for down payment assistance.
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You can also utilize the HUD housing counseling services. These counselors can help point you in the right direction. They will also help you understand the responsibilities and risk that come along with buying a home so that you make sure that you are making a wise choice.
Make Sure you Can Afford the Loan
Before you jump headfirst into any down payment assistance you can receive, make sure you can afford the mortgage. No assistance that you receive will help you own a home free and clear. You are going to have to take a mortgage and repay it. If you don’t repay it, you risk losing the home.
IN addition to the mortgage, you may have a down payment loan that you have to repay. Make sure that you clearly understand the terms of the down payment assistance. Do you need to make monthly payments? Are the payments deferred until you sell the home? What are the terms? If you don’t understand them completely utilize the HUD counseling services so that you know what you are getting yourself into before you buy the home.
Down payment assistance can be a great way to buy a home. Just make sure that you exhaust all of your options at all levels of the state, county, and city level. There are also private organizations that offer help to certain buyers. Once you have your assistance and mortgage in place, you’ll be well on your way to owning your own home.
