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Down Payment Assistance

If you worry about the costs associated with purchasing a home, there is help available to cover your most significant upfront cost — the down payment.

Down payment assistance offers financing that makes buying a home more accessible and affordable. Our program has flexible qualification requirements to meet your needs.

What is Down Payment Assistance?

You have a handful of options when choosing the right loan to buy a home. Did you also know that you have options for covering your down payment when you’re ready to take the first steps into home ownership?

Down payment assistance comes in many forms. Beyond researching state and local programs, there are options provided by your mortgage lender that can smoothly work with your purchase loan. These function like a second mortgage, offering affordable payback, deferred, and forgivable options.

Say you’re buying a home with an FHA loan and you need a minimum down payment amount of 3.5% of the home’s value. A home that costs $200,000 or more would require an upfront down payment of at least $7,000.

With down payment assistance, purchasing a home becomes more accessible to you, sooner. It helps you build immediate equity in your home and even avoid added upfront and ongoing costs like mortgage insurance.

Our down payment assistance offers flexible qualification requirements, avoiding typical restrictions like income and purchase limits or first-time homebuyer requirements.

How to Get Down Payment Assistance

To learn whether down payment assistance is the best option to help you purchase a home, connect with us. To get you started, we’ve outlined the steps and documentation needed to help you understand the process of getting down payment assistance.

The Financing Process

Our down payment assistance program saves you time from having to search for local assistance options. We work with you to finance your home purchase with a long-term mortgage and the down payment assistance you need to help cover upfront costs.

By sharing basic information about your potential home purchase and interest, we’ll work with you to pull your credit report and discuss your finances.

Based on what you’re looking for, we will  review the options that would be them most beneficial for your situation. We’re with you through each step to help you purchase your home with affordable financing.

Requirements to Meet

These are some of the common requirements often needed to qualify for down payment assistance. If you have questions about these requirements, we’re here to help.

  • Credit score requirements vary. In most cases, a credit score of 660 or higher qualifies.
  • Income is considered but there are no income limits for eligibility. A low Debt-to-Income ratio helps and can allow for more flexible credit score requirements. This ratio shows how much of your monthly income goes to paying your debt.
  • You will need to attend a short, 20-minute homebuying educational course.
  • You will need to contribute some of your own money to the purchase of the home to show your investment in the purchase.
  • The house you are purchasing with down payment assistance needs to be your primary residence.

Down Payment Assistance FAQs

Financing a home is an important investment. It’s ok to have questions. We’ve compiled answers to the frequently asked ones, but don’t hesitate to contact us to ask more.

How does getting down payment assistance impact my timeline for buying a home?

Many people assume down payment assistance will slow down the process to close on your home purchase because it involves an additional layer of approval and coordination. This may be true for assistance programs available outside of what a lender offers.

We can work with you to secure approval for a purchase loan and down payment assistance more smoothly because both forms of financing are offered in-house.

What different types of down payment assistance are available?

Down payment assistance comes in many forms but there are generally four main types of down payment assistance programs.

Grants are provided by the government. They can cover up to 100% of a down payment and may involve extra coordination between the program itself and finding an approved lender who will work with it. These often involve meeting certain requirements based on the home’s location and are offered by states and even cities and various organizations. 

Outside of grants, there are also home loans, deferred loans and forgivable loans that all work similarly to a second mortgage.

They differ in how the loan is paid back. The first requires typical monthly payments. Where deferred loans don’t need to be paid until you move, sell or refinance the home. Forgivable loans can be forgiven after a certain amount of years and only need to be repaid if you move, sell or refinance too soon.

What are the benefits of using down payment assistance when purchasing a home?

Down payment assistance can give you the boost you need to afford a home sooner because you don’t have to save as long for the payment. Any down payment you make on your home purchase translates into your equity, which is the amount of your home that you own outright.

Beyond being able to make the investment in a home purchase sooner and begin gaining equity immediately, down payment assistance can help you avoid additional upfront and ongoing costs like mortgage insurance, which is required when a down payment doesn’t meet certain minimum requirements. 

What is a typical down payment amount when purchasing a home?

Down payment amounts depend on the value of the house you want to purchase and the loan program you are using to purchase your home.

For example, a typical minimum required down payment amount for FHA loans is 3.5% of the value of the home for credit scores of 580 or more. With a higher down payment of 10%, you may qualify to purchase the home with a lower credit score.

With a conventional loan, down payment requirements range from 3-20% depending on various factors and there are certain benefits associated with making a higher down payment.
Down payment assistance provides options to cover all or part of your down payment amount and various options for if and how that amount needs to be repaid over time.

Are there other upfront costs when getting a mortgage besides the down payment?

Depending on your purchase loan, you may need to account for several costs, both upfront and those included in your ongoing monthly payment. These will be clearly outlined as your loan is processed and before you close.

Beyond the initial down payment, you may also need to pay closing costs, which cover expenses such as loan origination fees, an appraisal, upfront mortgage insurance, title insurance, etc. These typically range from 1-3% of your total loan amount.

Certain purchase loans offer options to help you afford these costs, including FHA and VA loans.