About the First Time Home Buyer Program & Assistance

Down payment assistance programs aid first-time home buyers with the purchase of a home. Most mortgage lenders will require a minimum down payment of 10 to 20 percent of the purchase price of a home.

However, there are several government-insured mortgage programs that can reduce the amount required as well as programs that provide grants to those who qualify. 

By learning more about down payment assistance, you will be able to identify opportunities within your local community.

Each program that offers grants or other forms of assistance will have its own eligibility requirements that applicants must meet to gain help. By learning about each program, you will learn how to apply for assistance. 

What are down payment assistance programs? 

Home down payment assistance programs provide invaluable assistance towards a homebuyer’s down payment. These programs are designed to either reduce the minimum amount needed to purchase a home or provide financial grants that may be applied towards a home’s overall purchase. 

In addition to down payment programs, buyers can take advantage of grants that help with other purchase costs, including closing fees and other related expenses. 

Does down payment assistance need to be repaid? 

Generally, down payment assistance grants do not need to be repaid. However, certain programs may have specific requirements that must be followed once you receive grant funds. For example, some programs will restrict financial assistance to down payments, and therefore funds cannot be used towards closing costs or other related expenses. 

To avoid complications, familiarize yourself with the terms of your grant. Should you misuse the funds that you are provided, you may be required to repay the grants. In some cases, grants will be automatically converted to loans if they are not used appropriately. 

How to Qualify for Down Payment Assistance Grants

Down payment assistance programs each have their own eligibility requirements you must meet in order to enroll. The eligibility requirements for a program typically relate to the types of applicants these initiatives aim to help. 

For example, some home down payment assistance programs are designed to assist lower income families in achieving homeownership. In cases such as these, income-based requirements must generally be met before households receive benefits. 

For other programs, grants may only be available to certain areas and communities in an effort to promote homeownership and revitalization within those areas. 

Furthermore, several grant programs are only available to those who meet career-related requirements. There are several grant programs that are designed to provide assistance to medical professionals, law enforcement, firefighters, teachers, veterans and more. 

How to Keep Your Qualifications for Home Down Payment Assistance

Some forms of home down payment assistance will include continued eligibility requirements that must be met. The most common form of this is housing obligations that require you to live within your purchased home as your primary or sole residence for a specified period of time. 

It is essential that you always review continued eligibility requirements before accepting a financial award. Should you receive assistance with your down payment or other costs but fail to uphold these eligibility requirements, your grant could be automatically converted to a loan. Should this happen, you may need to repay this loan plus any interest that you accrue. 

How to Take Advantage of Government-Insured Loan Programs

Another form of down payment assistance reduces the amount you are required to pay as part of your mortgage agreement. These programs are mostly provided by lenders and government-insured loan programs. 

FHA down payment assistance allows applicants to reduce their down payment requirements to a figure as low as three percent, which is based upon creditworthiness. Likewise, a United States Department of Agriculture USDA-insured mortgage can eliminate down payment requirements. VA loans also eliminate down payment requirements in most cases, but without requiring borrowers to pay a mortgage insurance premium. 

You can apply for a government-insured loan program through participating lenders in your area. Your lender will be able to tell you whether or not you will qualify for one of these loan programs. The agent you speak with will also review your mortgage options with you. 

How to Apply for First Time Home Buyer Down Payment Assistance 

The best down payment assistance grants are often found on a local or state level. The opportunities that are available to you will vary depending on where you live. Therefore, it is essential that you take the time to thoroughly explore your options. 

For example, down payment assistance grants in Texas are offered by the Texas State Affordable Housing Corporation (TSAHC). This corporation not only provides grants for down payments, but the company provides competitive mortgages to qualifying first-time homebuyers and veteran applicants.

Moreover, down payment assistance in Florida is provided by Florida Housing. This assistance program provides grants, interest tax credits and competitive fixed-rate mortgages to first-time homebuyers and veterans who meet income, credit and purchase price requirements. 

How to Get Help Finding Down Payment Assistance Programs You Qualify For

There should be various down payment assistance programs available within your local community. These programs are offered by:

  • State and local offices.
  • Nonprofit organizations.
  • Charitable businesses. 

One of the best ways to learn more about the assistant program opportunities in your area is by speaking to local lenders. Mortgage lenders who have worked with state and local assistance programs in the past will likely have an idea of which programs you may qualify for. 

For the best response, it is worth taking the time to speak with multiple lenders about your options for assistance with down payment requirements. 

Learn About Other Resources to Help You Save 

While down payment assistance programs are an invaluable tool to new homeowners, it is essential that you try to save up as much as possible outside of these programs. It is not uncommon for programs to fail to cover the entire down payment amount, which will still leave you with the remainder to cover to qualify for a mortgage.

Therefore, it is essential that you plan for the future by budgeting and doing your research before you apply for a loan. If you are creating a new budget, it is worth taking the time to consider savings programs and accounts that can help you save more towards the purchase of a home. 

By preparing in advance, you can be more likely to afford the price of your down payment.