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Who Provides Assistance?
Various state and local agencies, along with both public and private organizations, offer down payment assistance (DPA) programs. Some common providers include:
- Federal Housing Administration (FHA)
- U.S. Department of Agriculture (USDA)
- U.S. Department of Veterans Affairs (VA)
- State Housing Finance Agencies
- City and County Housing Authorities
- Nonprofit Organizations and Employers
Who Qualifies?
More people than you might think! Eligibility for down payment assistance often depends on factors such as your job, location, or specific household circumstances. While many DPA programs target first-time homebuyers, there are several options that do not require you to be a first-time buyer.
What is a First-Time Homebuyer?
A first-time homebuyer is generally defined as someone who has not owned a primary residence in the past three years. However, there are exceptions, such as:
- Individuals who previously owned a home but are currently renting.
- Single parents who only owned a home while married to a former spouse.
- Homeowners living in mobile homes that are not permanently attached to a foundation.
Types of Down Payment Assistance Programs
Homebuyer Grants
- Grants provide financial assistance for home purchases and typically do not require repayment. These funds can sometimes be combined with other mortgage assistance programs to increase the overall benefit for homebuyers.
Forgivable Loans
- A forgivable loan acts as a secondary mortgage but is waived after the homeowner meets specific conditions, such as living in the home for a set number of years. Once the criteria are met, the loan is forgiven, meaning no repayment is required.
Non-Forgivable Loans
- These are typically secondary loans that must be repaid when the homeowner refinances, sells, or transfers ownership of the property. Some of these loans offer lower interest rates to make repayment more manageable.