What is Down Payment Assistance?
In a world filled with different desires, hopes and dreams, we all share one dream in particular. That one thing that most of us share is that we will one day own our very own dream home. The thought of this can be exhilarating. From the time you sit down and decide this is something worth pursuing to the time you move in it is exciting and one of the greatest experiences to go through.
"I Don't Have a Down Payment."
As exciting as buying your first home can be there will be a couple of things that stand in the way of making this dream a reality, if you don't have the right agent to help explain the options out there. Did you know that there are programs designed to help first time and sometimes other buyers with out of pocket expenses like down payments? Yes, in fact there are many types of down payment assistance and grants.
Most states have one kind of program or another. For example, one of the most popular in many areas of Ohio is the Ohio Housing and Finance Association program, (OHFA) and also USDA home loans (United States Department of Agriculture). Both of these programs can save a first time buyers significantly though, with a few restrictions, you don't necessarily have to be a first time buyer.
USDA loans are a zero down home loan, but only for eligible properties meeting certain criteria. The home must be in move in condition for starters, but also in a qualified rural area with a population of 25,000 or less. Here in Ohio, I can tell you whether or not a home is eligible.
OHFA is often a great alternative if the area you're looking in doesn't qualify for USDA, and you'll find more homes with similar criteria but less restrictions on population than USDA. OHFA provides 2.5% of the purchase price towards the down payment in the form of a forgivable grant. Be on time for the required number of years with your mortgage payment and poof! The grant is forgiven. Now, if you're financing with a low down payment type of loan like FHA which is 3.5% down, and qualify for OHFA you only need 1% down.
City and County Grants for Home Buyers
Too, many cities and counties offer additional grant funding to buyers and can range from $1,500 to $20,000. Once offered, these amazing housing assistance grants go very fast, so, it's important to ask your Realtor about what's available in your area, no matter what state you live in. Combine this with a low down payment home loan product like FHA and you'll find the financial path to home ownership much easier. In many cases if the grant funds exceed the down payment with these types of programs, the funds can be put towards renovations, repairs and upgrades.
Keep in mind, you'll also need to prepare for other closing costs regardless of the type of down payment assistance your seeking or qualifying for. It's a great time buy, with these mortgage lending rates being so low, however, all across Ohio and in many other states we continue to see house values improve and the asking prices for fair market value continue to edge upward. My advice is to take a look into your credit, work with a professional buyers' agent like myself, and take advantage of everything you can. I know a lot of Ohio mortgage lenders that are very familiar with these products and programs, and some that will even work with lower credit scores.
Again, ask the Realtor you're working with about any of these types of down payment assistance and grant programs to find out what's currently available. If you're looking into Southern Ohio Real Estate, I'm more than happy to help you out with pursuing down payment assistance and the purchase of a home. I love the Greater Dayton Metro Area and my real estate practice radiates out from Centerville to places like Springboro, Lebanon, Xenia, Kettering, Beavercreek, etc. Give me a shout!