In a recent study by NeighborWorks America the findings noted that seventy percent of U.S. adults were unaware that down payment assistance is available for qualified home buyers to assist in their home purchase. Down payment assistance can be quite beneficial for first time home buyers in making homeownership accessible to more families. The fact that so many families don’t know that such assistance is available was the message that stood out most from the study.
The findings were part of the second annual America at Home survey that is commissioned by NeighborWorks America which is a national nonprofit community development corporation based in Washington, DC. In a comment on the report by one of NeighborWorks staffers it was noted that “down-payment assistance programs make home purchasing more accessible for first time home buyers”, said Marietta Rodriguez, vice president of Homeownership Programs and Lending at the non-profit. “In addition, because many down payment assistance programs require home-buyer education, these purchasers tend to be more successful in the long term. Research has shown pre-purchase counseling helps reduce mortgage default and equips homeowners with the information they need to budget for other expenses and maintain their property”.
Most mid to large size towns and cities around the country have some sort of down payment assistance programs available to home buyers. Many of the programs have a first time home buyer requirement that stipulates that one cannot have owned a home in the most recent three year period. There are other requirements to qualify for down payment assistance and these requirements vary from program to program.
Down payment assistance programs can be city, county, or state funded and generally are started and maintained on the local level. Some programs have funding that is limited while others have funding that is replenished periodically and normally on an annual basis.
These down-payment assistance programs are critical to helping qualified first time home buyers make homeownership more accessible. Studies have shown that many families that want to buy a home can qualify based on credit score and income but often have trouble saving for a down payment. This is the problem in local housing markets that is solved by nurturing these locally managed down payment assistance programs in communities across the country.
How does one find Down Payment Assistance programs?
The best place to start is in your town’s local housing office in the community where you would like to live. Make an appointment to speak with a housing counselor who can provide potential home buyers with information on down payment assistance programs that service your area. Or, the next place for one to look to find down payment assistance programs that are available in one’s community is to visit the State Housing office or the State Economic Development office. These offices can either help potential homebuyers directly or they can refer you to community organizations that can help.
This article is written by Stephen Khan. Stephen is a mortgage loan officer based in the Phoenix, Arizona area and in addition to his loan officer duties he enjoys writing about mortgage related topics that help home buyers better prepare themselves to buy a home. For more information on mortgage programs and the entire loan process you can visit Stephens’s home mortgage website for more information or to contact Stephen directly.