Down Payment Assistance Loans

A down payment and closing costs on a new home can range from three and a half to 30% of the total home sale price. For a first-time home buyer, or a buyer who doesn’t have access to a large amount of cash, coming up with a down payment to purchase a new home can feel like a giant obstacle. A down payment assistance (DPA) loan provides a solution to this problem. With a down payment assistance loan, the buyer receives. There are a variety of programs ranging from interest free second mortgages to income-based grants.

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Below are a Few Examples of the Popular Down Payment Assistance Programs

  • The National Homebuyers Fund – This program offers multi-state assistance grants for up to five percent of the down payment costs, and these grants do not have to be repaid. This assistance is not just for first time homebuyers.
  • FHA Access Loan Program – This combines down payment assistance with an FHA loan and allows the buyer to borrow up to 103% of the new home sale price in order to cover the purchase of the home plus a three percent down payment.
  • State specific down payment grants – There are several down payment assistance options that are available in each state. Some of these grants are in the form of a low interest loan, and others do not require repayment. Call [MORTGAGE COMPANY NAME] at [COMPANY PHONE NUMBER] to find out what down payment assistance programs available in [NAME OF THE STATE].

How to Qualify for Down Payment Assistance

Down payment assistance programs typically vary from state to state, except for the FHA funded program. Some programs will offer a grant that is gifted to the buyer, and other programs will loan the down payment with the expectation of repayment. Qualifications vary as well, and this list is not comprehensive, but here are some of the common requirements for those looking for down payment assistance:

  • Must be a first-time home buyer. In many states, a first-time home buyer is classified as a person who has not owned property in the last three years.
  • The buyer must qualify for a 30-year mortgage. This could be an FHA, VA, or USDA loan.
  • The buyer must plan to occupy the property as a primary residence.
  • Have income within certain established limits
  • On average, the buyer should have a credit score of 640 or higher.

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