Down Payment Assistance available for you, is it real or rumor?

Yes it is real and yes it is available. Now before you start asking questions, we are not guaranteeing that everyone is eligible for Down Payment Assistance (DPA), but what we are saying is that it is often more available than buyers think. Not only is it available, but “the average assistance can go anywhere from $5,000 to $20,000... In some high-cost areas, the down payment assistance can be as much as $100,000”.  You might be reading this and you have no idea what Down Payment Assistance even is… well, allow us to explain.

What is DPA? State, county, and city governments provide financial assistance for people in their communities. To be eligible, you normally must be qualified and actually buying a home (you can’t hold onto the money until you are ready in a few years). Also, “you don’t have to be a low-income household to qualify for many of these programs. In fact, in some areas of the country you can earn considerably more than your area’s median income and still be eligible for down payment assistance. Sometimes high-income earners can qualify for a grant of up to 5% of the purchase price of the home!” The good news is that there are more than 2,300 home ownership programs around the country. In addition to DPA there are first-mortgage products, closing cost assistance programs, and many others. “There are all kinds of down payment programs aimed at certain professions and demographics: firefighters, protectors, teachers, health care workers, service members, persons with disabilities, and even people who are buying energy efficient homes.” This is often times money that DOES NOT need to be paid back by the borrower; we like to consider it a gift from the DPA fairy.

Aside from DPA, when looking for financial assistance to buy a home there are programs offered by states and local, or city governments that can be just a helpful. Here are some prime examples:

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  Grants: There are all types of grants: home improvement grants, investor grants, mortgage grants and the list goes on and on. There isn’t a limit on the amount of grants you can apply for, and often times the only condition is that you live in the house for a certain amount of years to avoid paying back any of the money afforded.
• Second mortgage loans: These are the most popular form of financial assistance for down payments and they carry the worst reputation, mostly because people don’t really understand how they work. It is a second mortgage, but almost always with very little or even no interest over a period of time. 
• Tax credits: As a part of the American Recovery and Reinvestment Act (2009) or more commonly known as the “stimulus package,” buyers may have up to 8k as a tax allowance toward down payments, closing costs and other upfront purchasing costs if they are a first time home buyer and purchase a home before December 1^st. What makes it even better, is that buyers do not have to wait until tax season to use this allowance. Aside from being a first time home buyer, the main stipulation is that buyers must have a mortgage insured by the Federal Housing Administration.

Does the house I like qualify for DPA? The good news is that about 70 percent of listings are qualified for some type of home buyer assistance program. There is almost always a cap on the sales price of a home, which excludes million dollar condos (see our blog Condos on the Rise) and beachfront mansions. This also means that the program will depend on what specific neighborhoods or even tax allocation districts are eligible. Do I qualify for receiving DPA? We wont call it bad news, so the regular news is that buyers have to meet certain eligibility requirements. This is where we come in; we recommend reaching out to your Realtor because we know what is going on in the area you want to buy in, and chances are we are able to access information easier than you are. There is a lot of money out there and we want nothing more than to help you see if it has your name on it!

See more at:

• http://www.frameworkhomeownership.org/blog/for-you-too#sthash.RjK8UAZt.dpuf 
• http://www.allamericangrantguide.com/real-estate-grants.php
• http://www.bankrate.com/finance/mortgages/use-first-time-homebuyer-s-credit-upfront-1.aspx#ixzz40FlJuZZ
• DownPaymentResource.com