Know This Before Looking For a Down Payment Assistance Program
(BrightPress.org) – When deciding to buy a house, many people soon realize they are not very prepared. That is because buying a home can be very expensive. One of the biggest obstacles to home ownership is getting together a down payment. It is a common misconception that people must save 20% for their down payment. If you thought that, don’t despair; you are one of nearly one-third of Americans who believe this. Luckily, that is not the case! Several down payment assistance options are available to help people get together their down payment.
What Down Payment Assistance is Available to Me
Providing a down payment is a necessary part of buying a home. A down payment is a set sum of money that a buyer will pay towards their home purchase. This payment goes towards the home’s overall purchase, with the remaining balance becoming the mortgage. There are a variety of support options available to assist you in making a down payment. Some of these options include federal loans, Chenoa Fund, and down payment assistance grants.
Federal Loans
Did you know there are several different types of loans that can help you buy a home? There are federal loans available that come with plenty of benefits. Some of the most common loan options include:
- FHA Loans
- VA Loans
- USDA Loans
FHA Loans
The Federal Housing Administration (FHA) issues this loan to qualifying people. This is a division of the United State Department of Housing and Urban Development (HUD). These loans allow potential home buyers to buy a home with a down payment as low as 3.5% if their credit score is 580. Homeowners with a credit score of 500 to 579 can buy a home with a 10% down payment.
VA Loans
Another federal loan option for buying a home is a VA loan. This loan is guaranteed by the United State Department of Veterans Affairs (VA). It allows eligible service members or their qualifying family members to purchase a home. One of the most significant benefits of this is that home buyers can buy a home with no down payment!
USDA Loans
The last loan on this list is a USDA loan. The United States Department of Agriculture (USDA) offers this loan to potential homeowners through the Rural Development Guaranteed Housing Loan Program. It is only eligible to rural home buyers but does allow them to purchase a home with no down payment.
Chenoa Fund
The Chenoa fund is a nationwide down payment assistance program available in all states save New York. The CBC Morgate Agency (CBCMA) offers a loan with up to 3.5% down payment assistance to eligible recipients. This is especially helpful when paired with loans like the FHA loan above, which requires a 3.5% down payment.
Down Payment Assistance Grants
Grants are a form of assistance that you don’t need to repay. Essentially, it is like getting free money! There are many down payment assistance grants available to help homeowners afford the down payment cost. In order to qualify for this type of assistance, you must meet specific eligibility requirements like income qualification. These grants are usually offered by non-profit organizations, local housing agencies, and even some employers!
Bottom Line
Don’t let getting a down payment together keep you from buying a house. There are a variety of down payment assistance programs that are available for you. Some of those options include federal loans, down payment assistance grants, and the Chenoa fund.
Remember, you don’t need to get together a 20% down payment. In fact, it may even be possible for you to buy a home with no down payment at all. Take your time and reach out to a qualified lending professional if you need more information or want specific questions answered.
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