Ready to Buy a House? How to Find Downpayment Assistance

(TargetDailyNews.com) – Have you heard that you can’t buy a house unless you have 20% upfront for a downpayment? This isn’t the case. There are several different types of loans and mortgages where you can buy a home with less downpayment. Even so, there may be times when you need some downpayment assistance to get that home secured. Here are three ways to help you come up with the downpayment as well as a potential future asssitance program that could help with up to $25,000 for eligible home buyers.

Grants

Grants are the best forms of downpayment assistance as they never have to be repaid. They have eligibility requirements and are typically state-funded. You can look toward your state’s housing authority, non-profit agencies, and even some employers. To find what is available in your state, a simple google search with “downpayment grant” and your state can bring up listings of what to expect. These applications will vary, and you will want to read all the fine print before you sign up but it is a definite way to get some of the funds you may need for your downpayment.

Loans

There are three main types of federal loan programs that can aid you when it comes time to buy a home and come up with your downpayment. There are FHA loans, VA loans, and USDA loans.

FHA Loans – Insured by the Federal Housing Administration, the FHA loan allows individuals to have a 3.5% downpayment when they have a credit rating of 580 or higher. Those with credit ratings between 500-579 can qualify for a loan with a downpayment of 10%. These FHA loans are from a division of HUD, or the U.S. Department of Housing and Urban Development.

VA Loans – Guaranteed by the United States Department of Veterans Affairs, or the VA, this loan is for those that have served in the military or their qualified family member. After proving their service history, applicants can purchase a home with little to no downpayment. These federal loans are given through the VA office.

USDA Loans – Provided by the United States Department of Agriculture, or USDA, this Rural Development Guaranteed Housing Loan Program is only given to those that are eligible and are rural home buyers. These loans are given with zero downpayment, making them a great choice for those that do not need to be in the heart of a city. These loans can be found through the USDA.

Chenoa Fund

This United States assistance program is available in 49 states, with the exception being New York. This project is by the CBC Mortgage Agency and can help with 3.5% downpayment assistance to those that are eligible. Those that are interested in seeing about eligibility and applying for assistance can do so through the Chenoa Fund website.

New Assistance Legislation

A proposed federal grant called the Downpayment Toward Equity Act is in the works and is a cash grant of up to $25,000. This allows for the downpayment as well as closing costs with a 5-year payback period. The Downpayment Toward Equity Act would be for first time home buyers and has not been given final approval, but is a possible new grant on the horizon. You can read more about this opportunity and the fine points of the program through Congress.gov.

These are a few of the areas that can help you with downpayment assistance, however, some states have more assets for those who are low-income and in need. Talking to local community projects can help you see all the assistance that is available for you.

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