If you’re searching for a new home but are concerned about how to finance the purchase, don’t panic. There are numerous forms of down payment assistance programs available. You just might be surprised as to how little money you actually have to put down to secure a home. As long as your credit is reasonable and your income is thoroughly documented, you probably won’t have trouble securing down payment assistance for a new home. Let’s take a look at some of the many down payment assistance options.
Fannie Mae’s HomePath
HomePath, a Fannie Mae loan program, is one of the more popular down payment assistance options. This lending program offers a three percent down payment and does not require an appraisal from the lender or mortgage insurance. If you are interested in a condominium, HomePath project requirements will be waived. Several different types of HomePath down payment assistance are available from interest only to adjustable rate and fixed rate loans.
Loans From the Federal Housing Administration (FHA)
The FHA provides mortgage loans administered through the U.S. Department of Housing and Urban Development (HUD). These loans are insured by the federal government. Their rates are quite low and qualification is easier than most think as credit is not as important of a factor. There is flexibility in terms of refinancing yet the approval process typically takes quite a while.
The American Dream Down payment Assistance Initiative (ADDI)
ADDI provides upwards of $200 million per year to financially challenged home-seekers throughout the United States. In order to qualify for ADDI down payment assistance, you must be a first-time home buyer who desires a home for a single family. If you have owned a house across the three years prior to seeking a home with ADDI assistance, you will not qualify for the program. Please reach out to a reperesentitive with Interest Smart Home Loans for more details on the ADDI program.
Down Payment Assistance Through the U.S. Department of Veterans Affairs (VA) Home Loan Guaranty Service
These are loans guaranteed by the federal government and made available to those who are veterans of the United States military. Anyone who is on active duty, in the reserves or a widower/widow of veterans will be eligible. Plenty of people will qualify for a VA loan who might not qualify for other types of loans thanks to the program’s relaxed standards. While VA loans have limits, they are sometimes significant enough to pay for the entire purchase of a house in an area of the country where homes are not egregiously expensive. These loans are provided by private lenders yet the VA guards these lending institutions against potential loses in the event that the borrower can’t repay the loan.
California’s Finance Housing Authority (CALHFA)
California’s housing authority provides a helpful listing of down payment assistance loan programs for home buyers. Check out each county’s specific housing authority website for a listing of these programs. While some of these programs force borrowers to repay the down payment in full, some do not. The specifics of these programs differ from county to county be sure to inquire with an Interest Smart Home Loans mortgage specialist for help in determining what are your best options.
These down payment assistance programs are governed by the state and local housing finance authorities as well as private groups. If you qualify for the highly coveted delayed repayment loan, you can secure upwards of $20,000 (interest-free) that will have to be paid back until you sell the home. The typical delayed repayment loan is usually for around $5,000 to $10,000 yet there are some buyers in expensive markets who receive six figure delayed repayment loans.