Photo (cc) by Tax Credits
How will you buy a home if you can’t get the down payment together? It’s a problem, especially for people who have never owned a home before. But finding a down payment may be less of a problem than you think.
The crisis in housing affordability appears to be inspiring more programs aimed at helping middle-class and working-class homebuyers. Says The Homebuying Institute:
At long last, we are seeing a resurgence of down-payment assistance for first-time buyers. Much of it is happening at the state and local level, as opposed to the broader national programs we’ve seen in the past.
At least 2,400 programs around the country offer grants, tax credits and below-market interest rates, according to Down Payment Resource, a company based in Atlanta whose software links buyers, agents and lenders with resources to get buyers into homes.
Some eligible households earn as much as $100,000
Many of the programs are aimed at middle-class and working-class buyers. Depending on where you live and the size of your household, you may be able to earn $100,000 or more and still qualify for some of the programs, says NeighborWorks America, a national network of 240 community organizations.
With this wealth of help out there, it’s surprising that so few homebuyers know about it. Seventy percent of American adults did not realize that down-payment programs are available for middle-class homebuyers, according to national telephone survey commissioned by NeighborWorks America.
Hundreds of millions in aid
This assistance is not just for first-time buyers; 37 percent of these programs have no first-time homebuyer requirement, according to Down Payment Resource.
NeighborWorks estimates that its local affiliates helped 6,000 people get $100 million in such assistance in 2014. More was expected in 2015. One example: In conjunction with NeighborWorks, Wells Fargo’s Housing Foundation sponsors grants in 30 cities to help homebuyers with down payments.
Who is eligible
Some of these homeownership programs are open to anyone who meets income and geographic qualifications. Others are limited to the purchase of a home in a targeted neighborhood. Still others are aimed at particular groups of buyers.
- U.S. military service veterans and their co-borrowers
- Native Americans
- Disabled borrowers
- Borrowers working in law enforcement, firefighting, education or health care
- Borrowers purchasing an energy-efficient home
A chart at Down Payment Resource shows programs and their funding across the country as of Sept. 30, 2015. The top 10 states (and the number of programs offered in each) are:
- California (412)
- Florida (230)
- Texas (206)
- Maryland (111)
- New York (77)
- Massachusetts (73)
- Pennsylvania (71)
- Colorado (67)
- Georgia (63)
- Washington (59)
Where to get help
These programs can vary a lot by location, and their qualifications can differ. Also, funding comes and goes. Because of this complexity, you’ll need two things: determination and expert assistance.
If you provide the focus, the expertise you need is out there. Here are the main sources: