Down payment assistance options for first-time homebuyers

by Julia Brown and Barry Weiss Weiss 07/24/2024

Affording a down payment on a home can be a major hurdle in the homebuying process, but luckily, there are down payment assistance options to help. With a down payment assistance program, first time homebuyers can get better mortgage terms and afford the house of their dreams.

Here is the most important info about these assistance programs for buyers to know:

How do down payment assistance programs work?

Down payment assistance programs are provided by a variety of institutions, including local government agencies and nonprofits. If you're eligible - decided based on household income, credit history and other factors depending on state - you can either receive a grant or special type of loan to pay for your down payment.

What are the different types of down payment assistance?

There are several types of assistance programs to help new buyers with a down payment:

  • Grants
  • Forgivable loans
  • Deferred-payment loans
  • Low-interest loans
  • Matched saving accounts

Grant programs offer monetary assistance without expectation of repayment. Other programs like forgivable loans or low-interest loans can serve as affordable second mortgages to cover the cost.

Who is eligible for assistance?

Eligibility requirements for down payment assistance programs depend on the individual program. Generally, you need a good credit score and a stable debt to income ratio. Some other requirements include:

  • The home must be in a specific location or county.
  • You must live in the home for a minimum amount of time (usually 3 to 10 years).
  • You have to be a first-time homebuyer.
  • You have to take a homebuyer education class.

How to apply for down payment assistance

The availability of down payment assistance is different in every area of the country. Check online or with a loan officer for eligibility requirements, applications and details.

Should you consider applying for a down payment grant or other assistance program? Remember these key points when factoring the option into your financial decisions. 

About the Author
Author

Julia Brown and Barry Weiss Weiss

Introducing the partnership of Brown & Weiss. Julia & Barry have a combined 23 years of experience in real estate and over 70 combined years of customer service. They each have lived in the Wilmington area for over 20 years and are very familiar with the local market. Their savvy negotiations and cutting edge marketing join uncompromising integrity as the hallmarks of Julia and Barry’s service. They are well respected in the Wilmington area not only for their professional track record and high ethical standards, but for being hardworking individuals that will do anything in their power to ensure their client’s success. Julia and Barry enjoy working for the number one real estate company in the area- Coldwell Banker Sea Coast Advantage. With the Coldwell Banker brand and their experience behind the sale or purchase or your home, you can’t go wrong. So, put us to work for you today and “Let us light your way home".