Home Buying Help: How Down Payment Assistance Programs Work
Buying a home for the first time is an exciting process, but it can be stressful if you don’t know whether or not you can afford your down payment. Fortunately, there are several down payment assistance programs that you may apply for through public or private support.
What Is a Down Payment Assistance Program?
Down payment assistance programs are available to first-time homeowners or those who haven’t owned a home in the last three years and don’t own rental or investment properties. Such programs are offered in a variety of ways and are either run by government agencies or nonprofits.
Common Types of Down Payment Assistance
Some of the most popular types of down payment assistance programs include:
- Grants – Grants are a beneficial form of payment because they don’t have to be repaid. It’s important to read the fine print on grants because it may create a lien on your property.
- Loans – Loans can either be:
- Forgivable – You won’t have to repay the loan as long as you stay in the home for a certain amount of time. Forgivable loans are helpful if you don’t plan on moving for a long time, but you will have to repay them if you move before your forgiveness period is up.
- Deferred-payment – You won’t have to repay the loan until you move, sell, or refinance. Deferred-payment loans aren’t forgiven, but they’re usually covered through selling your home.
- Matched savings programs – These programs are funded when homeowners deposit money into an account with an organization, and the organization agrees to match the homeowner’s deposit. The money accumulated in this account helps finance the down payment. It’s a wise choice if you’re able to put some money down, but need assistance in financing the rest.
How to Qualify for Down Payment Assistance Programs
Most first-time homeowners qualify for down payment assistance if they have a minimum credit score of 620 and do not exceed the area’s income limit. Some programs may require you to take classes on finances, and you may have to live in the home for a certain amount of time.
Finance Your Home with Butler Mortgage
If you’re a first-time homebuyer looking for a perfect mortgage solution, look no further than Butler Mortgage. We’ve helped homebuyers for more than 25 years in Florida and are proud to bring our services to Georgia. Fill out our free consultation form online or call us today at 407-931-3800 to get started.