However, there is plenty of help around if you know where to look. The Urban Institute counted 2,527 active down payment assistance and low-down payment programs across the country. And, according to a 2014 report from RealtyTrac<\/a>, 87% of U.S. homes qualify for down payment help.<\/p>\n A fair number of homebuyers do use these programs to buy their homes. \u201cI have clients that do it,\u201d says Jeremy Larkin<\/a>, a Houston agent who works with 73% more single-family homes than the average agent in his market. \u201cI have clients that are using it right now.\u201d<\/p>\n It\u2019s not a pipe dream, and it\u2019s potentially available to you today. Here\u2019s what you need to know.<\/p>\n As noted, there are more than 2,500 down payment assistance programs that are run by more than 1,300 different agencies.<\/p>\n Each agency and each program has its own approach. However, they can generally be divided into these types.<\/p>\n These are financial gifts that typically don\u2019t have to be repaid. They are \u2014 obviously \u2014 the most desirable type of assistance.<\/p>\n There are different types of grants. One popular grant type is a matched savings grant, which matches the buyer\u2019s down payment contribution, up to a certain amount. In other words, the grant can provide only part of the down payment \u2014 if a buyer wants to put 20% down on a house, they\u2019ll need to come up with 10% before the grant will offer them the other 10%.<\/p>\n These are loans taken out to subsidize the down payment, in addition to taking out a principal mortgage. These loans have to be paid back, although sometimes the payments don\u2019t start for a few years.<\/p>\n Second mortgages may charge zero interest, or they could charge higher or lower interest than the principal mortgage, again, depending on the program.<\/p>\n These are second mortgages that, like the name indicates, may be forgiven \u2014 that is, they may not have to be paid back \u2014 but there are certain conditions that the homeowner has to meet. Usually, the buyer will need to stay in the home for a certain amount of time; they can\u2019t sell, refinance, or move out of the home for a while.<\/p>\n The time period you have to stay put to get the loan forgiven may just be a few years, or it may go up to 20 years.<\/p>\n A 2016 RealtyTrac study found homeowners who use down payment assistance save nearly $18,000 on average over the life of the loan<\/a>, compared to buyers who aren\u2019t taking advantage of these programs. That doesn\u2019t mean buyers got that much money in cash for a down payment, however.<\/p>\n The actual assistance came to $5,965 on a median-priced home. Most of the savings \u2014 another $11,801 \u2014 came from the lower monthly mortgage payments over the life of the loan.<\/p>\n Not just anybody can use a down payment assistance program. They are usually intended to help specific buyers.<\/p>\n While the programs vary in their requirements, here are some common eligibility guidelines.<\/p>\n First-time homebuyers are most frequently the beneficiaries of these programs.<\/p>\n That doesn\u2019t mean you cannot have ever owned a home, however. If it\u2019s been three years since you last owned a home, you may qualify as a first-time buyer.<\/p>\n Income caps are common for these programs. Most programs are geared toward low- and middle-income buyers. But what qualifies as low- or middle-income depends heavily on your area.<\/p>\n For instance, the California Housing Finance Agency (CalHFA) MyHome Assistance Program<\/a> says buyers in Los Angeles County can earn up to $153,000 and still qualify.<\/p>\n Down payment assistance is not for investors, but for borrowers who plan to live in the home after purchase.<\/p>\n People purchasing second homes or vacation homes generally do not qualify for down payment assistance.<\/p>\n Typically, down payment assistance programs are only available for designated geographical areas. However, the large number and wide variety of programs means that odds are there is a program available for any area.<\/p>\n Often, the buyer has to contribute some of the down payment in order to qualify for the down payment assistance.<\/p>\n This is a requirement for many programs. Applications may only be approved after the borrower has taken an approved buyer education course.<\/p>\n As the name suggests, down payment assistance programs only help you with a down payment, which is only a portion of the cost of a home. As such, borrowers will also have to qualify under the guidelines of a mortgage lender, including meeting the income, debt, credit history, and other requirements.<\/p>\n While these are the most common qualifications, there may be others. Eligibility can also turn on factors such as the size of the loan and the size of the family occupying the house.<\/p>\n The plethora of restrictions mean that down payment assistance, while very helpful to those who qualify, isn\u2019t available to everyone. Larkin says he brokers a deal using down payment assistance only once every three months.<\/p>\n \u201cWe\u2019ll get more people that ask about it and don\u2019t qualify for it,\u201d Larkin says. In his market, with his clients, the income caps are usually the requirement that borrowers can\u2019t meet in order to qualify for down payment assistance, he says.<\/p>\n In addition to these general requirements, some down payment assistance programs target specific groups of people. For example:<\/p>\n Down payment assistance programs can be used with most loan types \u2014 including conventional loans and government-backed loans like FHA, VA, and USDA loans \u2014 but not every lender is able to accommodate them.<\/p>\n For buyers struggling to come up with any<\/i> savings for a down payment, there are two zero-down mortgage options: VA and USDA loans.<\/p>\n The zero-down VA loan program is available to qualified active and former service members and their spouses. USDA zero-down loans can be used, subject to income restrictions on the buyer, in many areas that are more suburban and rural.<\/p>\n If you plan to use a down payment assistance program, make sure to ask your lender if they support that program first.<\/p>\n Down payment assistance is not necessarily right for, or available to, every buyer.<\/p>\n The major benefit is that assistance makes it possible for someone to buy who doesn\u2019t have enough money for an adequate down payment. \u201cThis particularly helps the younger generation that hasn\u2019t had the opportunity to save money,\u201d Larkin says. \u201cThis can definitely get them in the home.\u201d<\/p>\n With all the restrictions, it may seem unlikely that you can find a program that would work for you. However, that\u2019s not necessarily so.<\/p>\n The Urban Institute said in its report that in metropolitan statistical areas it studied in 2017, between 22% and 51% of people could qualify for anywhere from 3 to 14 programs.<\/p>\n And the amount of assistance available ranged from $2,000 to more than $39,000. So it makes good financial sense to at least check.<\/p>\n Here are ways to find a down payment assistance program that could help you.<\/p>\n One way is to simply ask your real estate agent for a referral. \u201cAlign yourself with a quality agent,\u201d Larkin advises.<\/p>\n \u201cMost quality agents are going to have relationships with lenders that are going to be able to educate on this.\u201d<\/p><\/blockquote>\n The federal Department of Housing And Urban Development has an online database<\/a> of housing assistance programs by state.<\/p>\n Visiting this website and clicking on your state will pull up resources including down payment assistance programs that may be available in your area.<\/p>\n For instance, the links for Texas include the Texas State Affordable Housing Corporation<\/a>, a non-profit with a Home Sweet Texas Home Loan Program that helps low- and moderate income Texans with down payment assistance grants and forgivable loans.<\/p>\n![\"An](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2021\/01\/down-payment-assistance-envelope-666x381.png\")
<\/a>Types of down payment assistance programs<\/h2>\n
Grants<\/h3>\n
Second mortgages<\/h3>\n
Forgivable second mortgages<\/h3>\n
How much can buyers save with down payment assistance?<\/h2>\n
![\"Pottery](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2021\/01\/down-payment-assistance-home-666x381.png\")
<\/a>Qualifying for down payment assistance<\/h2>\n
Have you owned before?<\/h3>\n
How much do you make?<\/h3>\n
Owner-occupants only<\/h3>\n
Primary residences only<\/h3>\n
Geographic restrictions<\/h3>\n
Buyer contributions<\/h3>\n
Buyer education<\/h3>\n
Qualifying for a mortgage<\/h3>\n
\n
Can you use down payment assistance with a conventional loan?<\/h2>\n
Why would you use down payment assistance?<\/h2>\n
![\"A](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2021\/01\/down-payment-assistance-learn-666x381.png\")
<\/a>How to find down payment assistance to buy a home<\/h2>\n
Agent referral<\/h3>\n
HUD directory<\/h3>\n
Internet search<\/h3>\n