If you’re scrambling to find cash to buy a house, down payment help is available through a number of outlets, and some of these programs aren’t just earmarked for buyers with low incomes. Sometimes it just takes a little research, patience and creative thinking to get into the house of your dreams. In fact, research found that 87 percent of U.S. homes are eligible for one or more homeownership programs, and the down payment program benefit most frequently found is $10,000, according to Down Payment Resource (DPR).
There are more than 2,000 counties that have at least 10 down payment programs available to prospective homebuyers, and 37 percent of those programs don’t require that you be a first-time homebuyer. According to DPR, California has 412 homeownership programs, Florida has 230, Texas has 206 and Maryland has 111.
If you’d like to get help with your down payment, here are four options to study:
1. Down Payment Resource
This organization was developed by Atlanta-based Workforce Resource, a web-based software company with a mission to connect people with hard-to-find financial resources. You can check your eligibility on their site by entering where you want to buy a house, its estimated price, your annual household income and other questions, such as your profession and if you’re a veteran. It will then match you to any programs that are available to you.
2. Help for Community Service Professionals
Are you an educator, protector, nurse, veteran, police officer or another important community service professional? If so, you could be eligible for assistance with a down payment. In fact, more than 14 percent of homeownership programs are designed just for you. These can be especially helpful in high-cost markets because the programs can help workers live in the communities they serve.
For instance, the Police in the Community Loan Program (PIC) provides down payment assistance loans to police officers who are purchasing their first home in San Francisco, California, where housing can be very costly. Loan funds have been made available through contract negotiations between the city and the Police Officers’ Association.
If you are a veteran or are currently in the military, you could be eligible for a VA Home Loan with no down payment at all, according to the U.S. Department of Veterans Affairs. Since the department guarantees any losses that may occur, lending institutions can offer you more favorable terms for your new home, such as down payment assistance, a competitive interest rate and property tax reduction. You don’t even have to be a first-time homebuyer to get some of these benefits, so reach out to your state’s VA office to find available programs.
3. Employer-Assisted Housing Programs
If you need help coming up with a down payment, check with your employer. You may be surprised to find that you can get help with your down payment and closing costs from the company that signs your checks. Employer assistance can come in the form of a grant, a direct, fully repayable second mortgage or unsecured loan, a forgivable second mortgage or unsecured loan, or a deferred-payment second mortgage or unsecured loan, according to Fannie Mae.
Some employers offer discounts or programs that match what you save for a down payment. Some lenders or banks, for example, may offer their employees a small percentage discount on a home loan. It’s certainly worth asking your employer if they offer such programs as you look to purchase a home.
Research has shown that companies that participate in affordable housing programs have seen an increase in stability within the company and a decrease in turnover, absenteeism and stress, according to the Greater Minnesota Housing Fund.
4. Family Members
It’s tough to ask your family for money. But sometimes you have to sit down with your parents, grandparents or whoever it is you’re requesting money from and be open about what you need. If you have people in your life who can help you, this may be good option. However, documentation is a very important part of this process. If a family member gives you the money, you need to fill out a gift letter, and then validate it with a copy of the check and your deposit receipt. Keep in mind that a gifted down payment could be taxed depending on the amount of you receive, and that there are some lenders who won’t accept a gifted down payment unless you put 5 percent of your own money into the mortgage.
For many buyers, getting help with a down payment is necessary to purchase a home. Luckily, there is help out there, and all it takes is research and some careful consideration of the available options. Use these tips, and for more resources, head to Owners.com.