What is down payment assistance?
Raising enough cash for a down payment can be a formidable hurdle for home buyers, but there are loans, grants, tax credits and other down payment assistance programs that can help clear the way. There are many home buyer assistance programs across the U.S., but it’s important to know that availability and qualification requirements will vary by state.
More on down payment assistance programs
There are several types of down payment assistance programs. Some government units and nonprofit agencies offer second or third mortgages or grants with zero percent interest, deferred payments and loans that may be forgiven. State-run Housing Finance Agencies (HFA) offer affordable first mortgages with below-market interest rates and reduced closing costs and fees. The federal government offers help through Mortgage Credit Certificates (MCCs), an annual federal income tax credit that enables first-time home buyers to offset interest costs.
Who offers these programs?
The widest selection is offered by HFAs, state-chartered authorities that help residents find affordable housing. But many programs are offered through county and municipal units of government with guidelines adjusted for local home prices and income levels. Assistance also is offered through area housing authorities and nonprofit organizations. Some employers also offer down payment assistance programs — most commonly seen in the public sector and the health care field.
What are common requirements to qualify?
Qualifications vary by region but are based on your income, the price of the home and any history you have as a homeowner. Assistance is available only for a home you plan to occupy and isn’t available for vacation homes or investment properties.
Do you have to be a first-time home buyer?
You don’t have to be a first-time home buyer to qualify for assistance. If you haven’t owned a home in three years and are now renting, you may qualify as a first-timer. Speak with your U.S. Bank mortgage loan officer for more information on down payment assistance programs in your area.