Your Guide to Down Payment Assistance

(DailyDig.com) – When it comes to buying a house, many people are not prepared. That’s because it’s very expensive to buy a home. One of the biggest obstacles that homebuyers face is getting a downpayment together. However, it’s a common misconception that people need to save 20% for their down payment! Nearly one-third of Americans believe they need a 20% down payment to buy a home. Luckily, that’s not the case! There are down payment assistance options available that can help people get their down payment together.

What Down Payment Assistance is Available

Generally, a necessary part of buying a home is providing a down payment. A down payment is a sum of money that a home buyer will pay during their home purchase. This lump sum will go towards the overall purchase of the home (which means the mortgage will be the remaining balance). Luckily, there are a variety of support options available! Some available options include:

Federal Loans
Chenoa Fund
Down Payment Assistance Grants

Federal Loans

Many people don’t realize that there are different types of loans that can help people buy a home. However, there are federal loans available that come with plenty of benefits. Some federal loan options include:

FHA Loans
VA Loans
USDA Loans

FHA Loans

This loan is insured by the Federal Housing Administration (FHA). This is a division of the United States Department of Housing and Urban Development (HUD). These loans give homebuyers the opportunity to buy a home with a down payment of 3.5% if their credit score is 580. However, homeowners that have a credit score from 500 to 579 can buy a home with a down payment of 10%.

VA Loans

Another federal loan for buying a home is a VA loan. This loan is guaranteed by the United States Department of Veterans Affairs (VA). It is designed for eligible service members or their qualifying family members. One of the biggest benefits of this loan is that homebuyers have the opportunity to purchase a home with no down payment!

USDA Loans

Finally, on this list are USDA loans. These loans are provided to homebuyers through the United States Department of Agriculture (USDA) Rural Development Guaranteed Housing Loan Program. It is only available to eligible rural homebuyers but can allow homebuyers to purchase a home with no down payment!

Chenoa Fund

Chenoa fund is a nationwide down payment assistance program that is available in every state except New York. It is made available by the CBC Mortgage Agency (CBCMA) and can give up to 3.5% down payment assistance to eligible recipients. This is especially helpful when your down payment requirement is 3.5% (for example, when you get an FHA loan!).

Down Payment Assistance Grants

Grants are a form of assistance that doesn’t need to be repaid. Basically it is a form of free money! There are down payment assistance grants available that can help homeowners handle the cost of their downpayment. Generally, in order to qualify for this assistance you will need to meet eligibility requirements like income qualifications. You can expect to see these grants available through non-profit organizations, local housing agencies, or even employers!

Bottom Line

When it comes to getting a downpayment together for a house, it may be easier than you think. That’s because there are a variety of down payment assistance options available. Some options that are available include:

Federal Loans
Chenoa Fund
Down Payment Assistance Grants

Again – this is very important – that a common misconception that homebuyers need to have a 20% down payment. In fact, it may be possible to buy a home with no down payment at all depending on the type of down payment assistance you get! Take your time and reach out to a lending professional to get more information and get your questions answered.