With the ongoing pandemic, a little financial assistance wouldn’t hurt, especially if you are tight on money and the economy is tanking. This is the reality that you and millions of Americans are living in, and in a situation like this, it is really adaptation that is the key to getting through the entire crisis smoothly.
Now, if you are looking to buy a house and don’t have the money for the down payment, then you are in luck because the Down Assistance Program can definitely help, as it has helped millions before you get the house of their dreams. This source of funding is supported at the federal, state, and local levels and serves to significantly reduce the down payment you need to purchase a home.
The way it works is quite simple. Let us say you want to purchase a residence worth $150,000 and the down payment is $4,500 (around 3 percent of the total). Coming up with that amount may take a little time if you don’t have a portion of that amount aside, but the Down Payment program speeds up the process for you and provides the much-needed financial support you require (given that you are eligible) to secure a clean purchase.
Determining how much assistance you are entitled to get may depend on the area that you seek to live in and make the purchase. Your level of need and the zip code are two extremely important factors that are used to assess how much of a contribution you would need. Though there are federal regulations and standards that need to be upheld, state governments and local organizations have their individual policies that they use to move the process forward and serve their local communities.
Types of Down Payment Assistance
As there is a huge of variety of Down Payment Assistance funds, here are some of the most common forms you will find out there:
- Zero-interest, deferred-payment loans: Though the rules and regulations of this loan vary, the general policy is that repayment towards this type of loan (which assists covering the down-payment and closing expenses) is not required until after the mortgage is refinanced and/or expired and the home is sold.
- Zero-interest, forgivable loans: These are loans that offer a grace period of up to five years (at times) for repayment with no interest. It is not a requirement that the money is paid so long as the buyer receiving the assistance owns and lives in the property until after the grace period is over.
- Grants: It’s basically free money that they give you if you qualify to help pay the down payment.
- Low-interest loans: These are loans that do require repayment throughout a determined period, such as eight years. It creates a long payment plan for the down payment and other property-related expenses. Overall, the zero-interest loans seem like the most generous of the offers.
The good news is that you can get a general idea of where you stand in terms of qualifying for the loan by simply paying a visit to the Down Payment Assistance website and completing a brief questionnaire, which will ask you about the property you wish to acquire and how much funding is needed. This online questionnaire does not require a credit check and is free of charge.
Nonetheless, we do recommend that in order to qualify, you maintain good standing with your credit rating with at least a credit score of 550. It should also be noted that down payment assistance can only be provided by those seeking to purchase single-family homes, not apartments and mobile homes.