Down payment programs may provide grants or forgivable loans for your down payment and closing costs. These programs provide a set amount of money to qualified homebuyers to cover their down payment or closing costs. FHA loans can also be combined with a down payment assistance program, helping offset the costs of premiums and mortgage insurance.
Down payment assistance programs are designed to help homebuyers who might otherwise be shut out of the market. The purpose of this program is to make funds available to eligible applicants who are interested in purchasing a home but need financial help to pay the upfront costs, which include the down payment, as well as the closing costs and prepaid items required to obtain homeownership; generally based on your income and how much home you’re buying. Home buyer programs can help more families build some equity when they purchase and take advantage of record low interest rates.
The three main types of down payment assistance are grants, second mortgage loans, and tax credits. Grants are funds that you do not have to pay back as long as you own and occupy your home for a certain period of time. Second mortgage loans are the most common down payment source, many offered by state and local governments have low or zero interest rates, and the payments are deferred over a specified time span and, in many cases, the loan is completely forgiven over time.The final type of assistance borrowers may receive are tax credits. Certain states and local governments, including housing finance agencies, issue mortgage credit certificates, which reduce the amount of federal income tax you pay. This makes more money available upfront for your down payment or closing costs.
Down payment assistance can help you prepare for the home buying process with the upfront cash for the down payment so you can plan for other homeownership expenses and set you up for long term homeownership success.
Please call us today at 817-484-0212 to speak to us about our down payment assistance services.