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Can you get down payment assistance for your new home?

First, let’s bust a common down payment assistance myth: it’s not just for lower income home buyers. There are hundreds of down payment assistance programs offered across the country for all types of buyers. Many programs are from communities that want to spur construction or homeownership in a particular area.

It’s always a good idea to look into these programs regardless of how much money you have saved.

Do you have to pay back the funds?
Not always. It depends on the program you use.

Do you have to be a first-time home buyer to qualify?
No. Many programs are available to people regardless of how many times they have purchased a home in the past.

Are the programs hard to qualify for?
Not at all. Some are available to everyone and others have light restrictions.

For those with restrictions, most people still qualify since they have lax income and credit score requirements. As example, you may need to make equal to or less than 115% of the median income for the county in which you live. That means if the median income is $100,000, people who make up to $115,000 qualify. The credit score requirements vary between programs too, but it’s common to need at least 620 (the average FICO score for Americans in 2020 was 711).

For down payment assistance programs to spur homeownership in select areas, there may not be any qualifications beyond living or building in the select area.

Does it matter which type of loan you have?
VA and USDA loans don’t require down payments anyway, so any additional funds you put towards the purchase of your home will help reduce your mortgage amount. Conventional and FHA loans do require a down payment, so the programs will help you qualify for these loans.

How can you find whether there’s a program you can use?
As we mentioned, there are literally hundreds of down payment assistance programs across the country. A state may have a handful of programs but a city’s metro area may have ten times more. The best way to comb through all the programs is to talk to your local home lender. Unlike national mortgage companies, your local lenders know incredibly specific programs available only through your community that will save you thousands of dollars. Contact your local lender and get details on which down payment assistance programs you can use.

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