How do you go from dreaming of owning a home to holding your first set of keys? For most new buyers, the down payment is the biggest hurdle, but maybe it doesn’t have to be.

There are currently over 2,200 homebuyer assistance programs available in the U.S. Let’s take a look at the 3 most common types of programs and how they work.

What are homebuyer assistance programs?

They come in various forms, such as loans, grants, tax credits and more. These programs provide eligible homebuyers with down payment help, cover closing costs and may get you into a home sooner than you would have otherwise.

You can work with a participating lender to apply and access down payment help, or you can contact the agency offering the program.

How do you qualify?

Both you and the home you are purchasing must be eligible. Homeownership programs are for owner-occupant buyers only—no investment properties. You must make a minimum investment, qualify for a first mortgage and complete homebuyer education. Common eligibility factors include the home’s sales price, homebuyer income and homeownership history.

Your occupation can help give you a boost. There are often additional benefits, or even entirely separate programs, for educators, protectors, health care workers, veterans and households with disabled members.

Do you have to be a first-time homebuyer?

It’s important to know that a first-time homebuyer is defined as someone who hasn’t owned a home in three years. So, if you owned in the past but are renting now, you may be a first-timer again! Plus, across our database of programs, 38 percent don’t have a first-time homebuyer requirement.

3 most common types of programs

1. Down Payment Assistance Programs

The largest category of programs—74% to be exact—are down payment assistance and closing cost programs. Down payment assistance (DPA) is an umbrella term for programs offered by federal, state, county or local government agencies, nonprofits and employers. DPA programs come in 2 primary forms:

• Grants which do not have to be paid back
• Second mortgage loans with varying payback or loan forgiveness provisions

Down payment assistance grants

Grants are gifts at closing provided by an eligible third party to help cover the cost of some or all of your down payment or closing costs. They do not have to be repaid by the homebuyer, do not incur a lien on the property being purchased, and have no associated note or deed.

Second mortgage programs

Many down payment programs come in the form of a second mortgage, or subordinate lien, with varying payback provisions.

Repayable DPA programs provide down payment funds at closing often as a 0%-interest second loan, but some may accrue interest and some may be amortizing loans. These programs typically range from 5-year to 30-year loans with varying repayment terms, which may start immediately or kick in after a predetermined period.

Deferred or silent second programs postpone repayment of the down payment assistance until the borrower sells, refinances, rents or moves out of the home. Buyers who plan to live in the home for several years will benefit most from the home’s appreciation in value.

Forgivable second mortgage programs forgive some or all of the DPA amount. When and how much of that down payment help is forgiven may vary, but it’s common for a percentage of the loan to be forgiven each year for a predefined number of years. However, if the program’s conditions are not met—for example, the buyer moves out of the home—the loan must be repaid, sometimes with interest.

2. Affordable First Mortgages

Many larger housing finance agencies, particularly at the state level, offer first mortgages to accompany their down payment assistance programs. They are often funded by state housing finance agencies and may subsidize portions of the interest to offer rates below what the normal market can provide, helping lower your buying costs and monthly payments. They may also have reduced closing costs and fees and waive mortgage insurance requirements.

The USDA also has 2 first mortgage programs, the Rural Direct Loan and the Rural Guaranteed Loan, both primarily used to help low- and moderate-income individuals or households purchase homes in rural areas. Funds can be used to acquire, build (including purchase and prepare sites and provide water and sewage facilities), repair, renovate or relocate a home.

3. Mortgage Credit Certificates (MCC)

This annual federal income tax credit is designed to help first-time homebuyers offset a portion of their mortgage interest on a new mortgage as a way to help qualify for a loan. As a tax credit, not a tax deduction, the MCC helps reduce your annual taxes dollar for dollar.

The mortgage credit allowed varies depending on the state or local government that issues the certificates, but (in most cases) it is capped at a maximum of $2,000 per year by the IRS. MCCs can often be used alongside another down payment program.

Search for programs in your area that may be a fit for your situation. You can also look up your state’s Housing Finance Agency and view available programs. View the agency’s list of participating mortgage lenders and interview a few to find the best fit for you.

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If you’re hoping to purchase a home, but struggling to save for a down payment, you’re not alone. Access to a down payment still remains the number one obstacle for homebuyers, but we have some good news for you…

Down payment help is available. 

Down payment assistance can make a significant impact to your home buying bottom line, and it’s never been truer than in today’s market. According to our latest Homeownership Program Index, there are over 2,000 homebuyer assistance programs available across the country. Yet, many homebuyers don’t know if they’re eligible for assistance or if programs are available in their area.

In fact, a survey by NeighborWorks America found that “less than half of non-homeowners are aware of any home buying education or down payment assistance programs in the communities”.

So, how do these programs help you? Let’s review the top five ways you can benefit:

1. Helps you purchase a home sooner.

Many buyers remain on the sidelines, saving money and watching interest rates. Down payment programs provide grants (gifts) or forgivable loans that help with your down payment and closing costs. These resources can immediately build your home buying power and help you take action sooner than you thought possible.

2. Helps offset FHA premiums and mortgage insurance.

Over the years, FHA has been the primary place for many first-time homebuyers to get a low-cost, low down payment loan. However, these affordable loans also include premiums (loan fees) and mortgage insurance to manage the risk on the loan. You may not know that your FHA loans can be combined with a down payment assistance program, helping offset the costs of premiums and mortgage insurance.

3. Helps community service employees live close to their job.

Many community service employees, such as police officers, firefighters and educators can’t afford to purchase a home in the community where they work, especially in high-cost areas. There are several targeted down payment programs that help keep valuable employees in the community, as well as reduce commuter costs.

4. Gives you an important cash cushion.

In the National Association of REALTORS® 2021 Profile of Home Buyers and Sellers, 61 percent of first-time homebuyers used savings to fund their down payment. Using a down payment program can help with the upfront cash for the down payment and closing costs, which leaves your savings for things like home maintenance and other homeownership expenses.

5. Provides valuable homeownership education. 

In order to qualify for a homebuyer assistance program, you will most likely be required to complete a homeownership education course. This course typically covers the logistics and steps of buying a home, as well as financing basics, homeownership responsibilities and contract obligations. This valuable, upfront education helps you prepare for the home buying process and sets you up for long-term homeownership success. Plus, many programs accept online homeownership education, making it easy for you to complete the course on your own time.

Ready to find out what programs may be a fit for you? Check out our program search to get started.

It’s been another tough year for many potential homebuyers who are finding it hard to compete in a housing market with increased demand and limited supply. We’re encouraged to see our top five blog posts for this year reflect a continuing desire for homeownership, as buyers look for alternatives and guidance in a tight market. 

1. Is down payment assistance for everyone?

Down payment programs can be a huge benefit to homebuyers, but it’s important to note that typically the buyer and the property must meet certain criteria. Family finances, as well as the location and price of the home will be taken into consideration when qualifying, and the criteria can vary greatly per program. Make sure to take the time to investigate the options for your personal situation.

2. You Don’t Need 20 Percent Down to Buy Your Next Home. Here’s why.

The 20 percent down myth has been circulating since the housing crisis, over a decade ago. Although putting 20 percent down isn’t necessarily a bad thing, there are other options. Low down payment loans and homeownership programs – grants, forgivable loans, below-market first mortgages, tax credits and more – are available across the country.

3. Manufactured Homes, Plus Down Payment Assistance, Could Be an Affordable Housing Solution

Homeownership programs are constantly evolving to meet the needs of homebuyers. One noticeable change over the last couple of years has been an increase in the number of programs that allow for manufactured housing. With inventory shortages and inflated home prices, manufactured homes could be an affordable option for first-time buyers.

4. 6 Steps for Buyers Competing in a Tight Market

The recent homebuying market has been tough, especially for first-time buyers. Things like making sure your down payment is in order, getting pre-approved, and attending a homebuyer education course can increase the chances of scoring a home, even in a tight market. 

5. Four New Year Steps for Every Renter

It’s true that the past couple of years have felt like a roller coaster for many potential homebuyers, keeping them on the sidelines. Being prepared can help remove some of the stress from the homebuying process. Regardless of your purchase timeline, these four steps are important for any renter considering homeownership.   

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Homebuyer checklists can be overwhelming, especially for first-time buyers. Should you shop for a home on your own, or find an agent to help? Are your finances in order? How do you find the right lender, and how much do you need for the down payment?

If it feels like there’s a long list of obstacles standing between you and owning a home, homebuyer education or counseling may be a good first step.

It’s true this step may add additional time to the homebuying process, and in today’s competitive market, it may feel like you don’t have time to spare. But data shows that homebuyer education and counseling build successful long term homeowners. Plus, most down payment programs require the recipient to participate in these courses, so you’ll be a step ahead.

What’s the difference between homebuyer education and homebuyer counseling?

Homebuyer education is a course that covers the basics of homebuying, such as finding out how much home you can afford, choosing the best loan program, securing the down payment, and what to expect before and after closing. Courses range from four to eight hours long and can be completed in one or two days, either online or in-person.

Homebuyers with unique financial circumstances, or first-time buyers looking for a deeper dive into the homebuying process, may benefit from a housing counselor. A counselor can serve as a home buying coach, helping you understand the best plan for your individual situation. They can guide you through the homeownership process, assist with credit issues, review different loan terms, and help find homeownership education courses.

Is homebuyer education or counseling required?

If you’re looking for down payment help, most down payment programs require the recipient to participate in homebuyer education, most often through a HUD-approved counselor or agency. The type of course and time investment may vary from program-to-program. Some courses are offered in person and may require a Saturday commitment, but there are online options available, so you can complete the course when it’s convenient for you.

Even if you aren’t using a down payment program, you can still participate in an education course or counseling. Some employers offer homebuyer courses as a benefit to employees. And the Urban Institute makes the case for the broader benefits of counseling, as a tool that could help renters and landlords address financial instability brought on by the COVID-19 pandemic.

What does homebuyer education and counseling cost?

Most courses cost approximately $75-$100. With that fee, you also get access to planning documents, videos and other resources after the course is completed.

Some education courses or counseling services may be provided for free by a housing agency administering a homeownership program. It’s a good idea to talk to your lender or the homeownership program provider about the options available.

How to find a homebuyer education course or counselor near you.

You can find local counselors listed by state on HUD’s website.

Another option is to complete a Down Payment Resource homeownership program search. Click ‘Learn More’ and find a link to ‘Approved Education Providers.’

Even if you’re not a first-time buyer, homebuyer education and counseling can be beneficial. The homebuying process and requirements are constantly changing, and new homebuyer programs are being added everyday. Bottomline, when it comes to buying a home, there’s no such thing as being over-prepared.

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Are you an industry professional? Download our latest Down Payment Report for the data and news on first-time homebuyers and residential down payments.

Have a success story to share? Please contact us at info@downpaymentresource.com.

June is National Homeownership Month, where we celebrate the important role homeownership plays in neighborhoods and communities across the country.

Owning a home has long been the American dream, and even in this competitive market, homebuyers shouldn’t be discouraged. Whether you’re hoping to buy now or planning ahead, these steps will help clear the path to homeownership.

Last year, we conducted a six-part webinar series for homebuyers*. We discussed first steps, dispelled common myths, and provided a plan for successful homeownership.

The Path to Homeownership Part 1 – The Housing Counselor

Housing counselors not only help prepare buyers for the homebuying process, but also how to be a responsible homeowner.

In part 1 of our webinar series, we explore the value of housing counselors and the role they play in credit management, budgeting, and planning for mortgage qualification. You’ll also hear from Sylvia Alvarez, founder and Executive Director of the Housing and Education Alliance (HEA), regarding the first steps homebuyers can and should take as they prepare for homeownership.

The Path to Homeownership Part 2 – The Loan Officer

When considering homeownership, there are 3 people needed for every homebuying team. The loan officer is there to help homebuyers navigate the mortgage process and should be the second step on the path to homeownership.

Part 2 of our webinar series breaks down what homebuyers can expect when working with a loan officer. We discuss prequalification vs. pre-approval, mortgage insurance, and critical milestones in the qualification process.

Another thing to remember is that you don’t need 20 percent down to buy a home. Homebuyers should search for down payment programs in their market and ask loan officers what down payment assistance programs they offer.

The Path to Homeownership Part 3 – Mortgage Options

The number of home financing options available can be overwhelming, especially if you’re a first-time buyer.

This session in our webinar series covers the many mortgage options available, down payment requirements among them, and how homebuyers can determine the best options for them.

You will also hear from Sandra Heidinger, an Affordable Lending Manager in the Single-Family Affordable Lending and Access to Credit organization at Freddie Mac. Working collaboratively with lenders, non-profit agencies, and government agencies, Sandra creates outreach initiatives designed to increase homeownership opportunities and preserve homeownership for under-served families.

The Path to Homeownership Part 4 – Homebuyer Education

Even soon-to-be homebuyers who consider themselves experts should take advantage of homebuyer education. These courses often come with additional benefits such as lower interest rates, down payment assistance, and more.

Online options, such as eHome America, allow homebuyers to do education courses at home and at their own pace. Homebuyers will also have access to planning documents, videos, and other resources after the course is completed.

Part 4 of our webinar series explores the value of homebuyer education and how these courses help to build successful long term homeowners.

The Path to Homeownership Part 5 – The Real Estate Agent

Another important member of any homebuying team is the real estate agent. Finding a real estate agent can take time, and it’s important the agent has experience with a homebuyer’s specific needs, especially if the buyer is using a down payment program.

In part 5 of our series, we’re joined by Raoul Rowe, Broker and Owner of Ready Front Real Estate and the CEO of Texas Operation Giveback INC. Raoul discusses the process of finding properties, negotiating contracts, inspections and repairs, and how the real estate agent keeps everyone working together.

The Path to Homeownership Part 6 – Successful Homeownership

Closing on a home is only the beginning of the homeownership journey. The important work happens after the papers are signed.

The final segment of our webinar series explores what life looks like after closing. We discuss what to expect immediately after purchasing a home and how to plan and budget for long term ownership.

On Demand Webinars

Check out our YouTube channel for more educational content.

Our homebuyer playlist includes all of the webinars in our Path to Homeownership series. We also have a playlist for industry professionals, a lender playlist, and a playlist for real estate agents.

*This is not a certified homebuyer education course. Homebuyers should visit the HUD website to find a HUD certified Housing Counselor in their area.

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Are you an industry professional? Download our latest Down Payment Report for the data and news on first-time homebuyers and residential down payments.

Have a success story to share? Please contact us at info@downpaymentresource.com.

In April, we celebrated Financial Literacy and the signing of the Fair Housing Act. While both are critical initiatives, bridging the racial homeownership gap is more than a 30 day effort. Let’s keep the momentum going.

The Importance of Generational Wealth

Despite gains made after the signing of the Fair Housing Act in 1968, currently 71 percent of Asian Americans, 54 percent of Hispanic Americans, and 63 percent of White Americans can afford to buy the typical home compared to only 43 percent of Black Americans.

Black homeownership rates have been in decline for the past twenty years. And since homeownership remains the main engine for wealth building, this decline is affecting generations to come. 

The lack of generational wealth means large debts like student loans may prevent Black homebuyers from securing a mortgage. According to the National Association of REALTORS® 2021 Snapshot of Race and Home Buying in America, Black homebuyers reported an average amount of $40,000 in student loan debt. 

Black homebuyers were also found to be rejected for mortgage loans at a rate 2.5 times greater than White applicants. The main reason? Debt-to-income ratios.

Education Is Key

As first generation homebuyers, many youth in underserved communities are frightened by the overwhelming process of buying a home. A lack of education and experience leaves many feeling as if homeownership isn’t attainable. That’s simply not true.

Seeking out a HUD-approved housing counselor is a good first step. These trusted advisors clear the path to homeownership by providing advice on buying a home, renting, defaults, foreclosures, and credit issues. Studies have shown that pre-purchase education leads to mortgage literacy that can diminish the risk associated with homeownership.

What About the Down Payment?

Buyers don’t need 20 percent down. Low down payment options have been around for a long time. In fact, data shows that low down payment loans with sound underwriting (loan is fully documented, income verified) are just as successful as loans with large down payments.

There are also down payment assistance programs available in nearly every market nationwide. These programs provide down payment and/or closing costs assistance, so homebuyers can retain some savings after closing for things like home repairs and other unexpected expenses.

Keep the Momentum Going

There is a lot of misinformation and distrust surrounding the homebuying process. As an industry, we have to provide the tools and resources to empower young homebuyers to take that first step.

Fair housing and financial literacy benefit everyone. As the saying goes, “If you are more fortunate than others, it’s better to build a longer table than a taller fence.” Let’s build more wealth and improve communities by breaking down the barriers to homeownership once and for all. 

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Are you an industry professional? Download our latest Down Payment Report for the data and news on first-time homebuyers and residential down payments.

Have a success story to share? Please contact us at info@downpaymentresource.com.

Home prices are increasing faster than incomes, especially for younger households. Add in things like the pandemic and student loan debt, and it’s hard for many to see a path to homeownership.

Many millennials are turning to the bank of mom and dad. A recent report from Apartment List found that 63 percent of millennials surveyed do not have any savings for a down payment, and more than 20 percent expect financial help from family towards a down payment.

Alternative to the bank of mom and dad

Most buyers don’t know to look for down payment assistance that could help them save on their down payment, closing costs or provide tax savings. There are programs in every market designed to help otherwise qualified buyers overcome the down payment hurdle.

It’s also true that buyers are overestimating the down payment needed. Even this Apartment List study notes the difficulty saving for 20 percent down on a median priced home. But, 20 percent down is just a myth. In fact, the average down payment for a first-time homebuyer is only around 6 percent.

Instead, let mom and dad keep their retirement savings intact and do your research on the down payment help available in your market. There are even programs designed to help graduates with student loan debt.

An even bigger issue

Let’s also not downplay an even bigger issue. It’s primarily higher-income families who are able to support their adult children, however it’s renters from a lower-income background who are more likely to need assistance. This cycle reinforces existing wealth inequality that’s transferred from generation to generation.

Homeownership programs help address part of that issue. They give equal opportunity to eligible homebuyers, providing that leg up for buyers to get into the market and become homeowners.

Make mom and dad proud and do your homebuying homework, before going to them for help.

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Are you an industry professional? Download our latest Down Payment Report for the data and news on first-time homebuyers and residential down payments.

Have a success story to share? Please contact us at info@downpaymentresource.com.

If you’re the newbie buyer on the block right now, it’s tough out there. How can you be more competitive when you’re up against tight inventory and higher prices? Plus, if you’re currently renting, you don’t have equity from a home sale to help fund your down payment.

These six ideas can help you (finally!) score a home of your own.

1. Get your down payment in order.

Saving is always good, but you don’t need to wait to save for 20 percent down. The good news is there are many low down payment loans and down payment assistance programs available to help you get in a home sooner.

You just need to get your home financing plan together so you can act quickly when the right home becomes available. Start by first seeing if you may qualify for one of the more than 2,300 homeownership programs available across the country. You can also ask your agent and lender about options in your community. And, don’t forget to check with your employer – some offer Employer Assisted Housing programs as an employee benefit.

2. Get your homebuyer education.

Time to go back to school. Don’t worry, there won’t be a test and you can often do homebuyer education online on your own time or in a few blocks of time over a weekend. Online counseling options, such as eHomeAmerica, cost approximately $75-$100. With that fee, you also get access to planning documents, videos and other resources after the course is completed.

It might feel like you need to get out in the market immediately, but data shows that homebuyer education and counseling builds successful long term homeowners. Plus, most down payment programs require the recipient participate in homebuyer education so you’ll be a step ahead.

3. Get pre-approved – and shop your loan.

Ironically, we shop around for everything from appliances to mascara, but we don’t shop our home loan — one of the largest financial decisions we’ll make.

Interview at least three lenders – start with our 5 essential questions for your lender if you need help. Get pre-approved by your lender of choice — in a fast market, you need more than just pre-qualification. You need to show that you are actually approved for a home loan.

4. Contact a real estate agent.

Buying a home is one of the biggest financial decisions you’ll ever make. You need to be sure you have a good team on your side. Finding a real estate agent may feel overwhelming, but there are ways to narrow your search.

Ask your loan officer for a referral. Tap into your own network of friends and family who may have recently purchased a home. Or you can always search online for real estate agents in your area. Just make sure to do your research and interview a few candidates. It’s important that your agent has experience with your specific needs, especially if you’re using a down payment program.

5. Use technology to keep up with inventory.

Technology is your friend — automate that home search. Talk to your agent about setting up alerts so you know as soon as a listing is online. You can also sign up for accounts at the major listing portals like Zillow, Trulia and Realtor.com and register for alerts when new homes come on the market in your area. In a tight market, you want to be the first to know.

6. Pack some flexibility.

What if your offer doesn’t get accepted? If you’re a first-time homebuyer, it may be harder to compete against multiple offers in a fast moving market. Consider looking at “stale listings” — these are listings that may not have sold in the first few days, weeks or months on the market.

With everyone rushing to listings when they first hit the market, it can pay off to go back and revisit homes that were overlooked. If you are open to other home styles, neighborhoods or homes that need some love, you might be more competitive on the second look.

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Are you an industry professional? Download our latest Down Payment Report for the data and news on first-time homebuyers and residential down payments.

Buying a home is more challenging than ever in today’s Pandemic-driven housing market.  While mortgage rates are historically low, so is inventory.  Housing prices in the U.S. are up an average of 4% vs. last year at this time, and many markets are consistently experiencing overbids and multiple offers.  

This doesn’t mean first-time buyers should give up on buying a home, but it does take more planning, time, and effort.  Given below are some tips to help you more easily navigate the process.

Start with a housing counselor or lender and check out different down payment options.

As much as we love to look at houses online, you need to first make sure your finances are in order and determine what you can afford before you shop.  Many real estate agents won’t even show prospective clients properties without a pre-approval – and you’ll definitely need one prior to submitting an offer.  

Further, contrary to popular belief, you don’t need 20% down.  In fact, it’s more important to retain some savings to protect yourself from unplanned expenses. While many lenders are tightening up qualification requirements due to the pandemic, there are still many down payment assistance programs available that can help cover closing costs that will help give you an advantage over other buyers.  

Down payment assistance programs often require you to complete a home buyer education class.  That’s why it’s important to find out if you’re eligible for down payment help, and get started with the process early.  

Finally, most lenders are requiring additional documentation and might even want to verify your employment just before closing.  Given that many people are still working remotely, give yourself extra time to gather the documentation and verifications you will need. 

Pro Tips:  

• Research down payment assistance programs in your area. Contact the agency offering the program or a homeownership counselor who can help you with the process.
• Complete required home-buyer classes as soon as possible – that way, you won’t be scrambling at the last minute.
• Let your employer know you’re potentially purchasing a home and find out who you need to contact to receive employment verification. You may also want to inquire if your employed has homebuyer incentives available.

Find an agent to help you navigate your local market before you start looking.

Many areas are experiencing short listing times, over-asking price bids, and multiple offers.  Work with your agent to understand what’s happening in your market before you start looking.  For example, if homes are selling for 10 – 20% over asking, you may need to search for lower-priced properties to find a home within your budget.  

You also might need to submit an offer the day you view a property or commit to a quick-closing.  Have all of your paperwork and finances ready to go in case you find THE house and have to move quickly.

The Pandemic has made it harder to view homes in person, and you might have to rely more heavily on photos and virtual tours.  Be sure to look beyond the “beauty shots” to determine whether or not a property is right for you.  

Pro Tips:  

• Properties in need of a little TLC or haven’t been staged are more likely to have fewer offers than those that are move-in ready.  
• Have your agent do a “video walk-through” of a property if you can’t see it in person.  They’ll be able to point out potential issues, go at your pace, and focus on specific features.  

Buying a home in today’s competitive market can be challenging, but with good advice from your homebuying team, as well as some upfront planning, you’ll soon be living the American dream. 

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Are you an industry professional? Download our latest Down Payment Report for the data and news on first-time homebuyers and residential down payments.

Down payment help sounds great, but how does it actually work? What process should you follow?

While down payment programs vary greatly by state and community, there are some universal steps that will help you stay on track if a homeownership program is part of your home financing plan. Let’s look at how it worked for one Florida buyer highlighted in Business Insider.

One buyer’s story

Willy Harris, 24, and his girlfriend used a Florida first-time homebuyer program to purchase a $204,000 new construction home in Jacksonville, FL. The program allows first-time homebuyers within qualified income and purchase-price limits to receive up to $15,000 in secondary financing toward down payment and closing costs. If the homebuyer lives in the home for five years, the secondary loan is forgiven. Harris used a FHA home loan that required a 3% down payment.

They put down a $1,000 deposit to reserve the lot, while the grant covered their $7,750 closing costs and $6,150 down payment. The remaining amount of the grant went toward the principal of the home loan. Because they put 3% down, they also paid a monthly mortgage insurance premium of $109. Their first mortgage payment is currently $1,503 a month.

Harris recommends setting up a budget and savings plan, and researching programs that can give you a boost.

Check points to keep you on track

Follow these steps to get the most of using a homeownership program:

1. Do some upfront homework. Research local homeownership education and counseling services that can help you with the process.
2. Determine your budget. Figure how big a monthly mortgage payment you can afford on your salary. Don’t forget that your mortgage payment may include taxes and insurance too which you can estimate.
   Create a savings plan. Build a spreadsheet (or use an app) to track your expenses.
3. Research down payment assistance programs in your area. Contact the agency offering the program or a homeownership counselor who can help you with the process.
4. Both the buyer and the home must qualify for the assistance. Find out the home price limits and any community or neighborhood boundaries for the program that may impact your home search. Find out if you can use the program on new construction.
5. Get a list of participating lenders for the homeownership program, available on the program provider’s website. Not all lenders offer every program.
6. Get prequalified for a loan so you can review the numbers and make an educated decision on the type of financing.
7. Compare offers and ask lenders about any other programs for which you may qualify. You may even be able to layer programs, for example down payment assistance plus a tax credit.
8. Review mortgage insurance options with your lender.
9. Complete homebuyer education courses that are often required when using a down payment assistance program.
10. Ask about your options for using the funds. Can they be used for down payment or closing costs, or both?

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