What’s the No. 1 reason renters fear taking the leap to homeownership or don't even think the leap is possible? That pesky down payment. Even with an FHA loan that requires a minimum of only 3.5% down, the idea of setting aside several thousand dollars is daunting at the least (and, in many cases, darn near impossible).
A survey from Apartment List shows that most millennial homebuyers can’t come up with the funds for a down payment. “Seventy-two percent of millennial renters who plan to purchase a home cite affordability as a reason that they are delaying homeownership, with 62 percent pinpointing a lack of down payment savings specifically,” they said. “Forty-eight percent of millennial renters have zero down payment savings, while just 11 percent have saved $10,000 or more.”
Down payment assistance programs can fill in the gap, but many buyers don’t even know they exist. “Down payment assistance can come from many different sources— including federal, state, county, city and nonprofit agencies—and aren't always well-publicized,” said U.S News & World Report. Anyone who is interested in down payment assistance is encouraged to check with their real estate agent or lender, but doing your own research is key.
How to find down payment assistance:
1. Do a national search.
You’ll be surprised how many programs you can find. “Do you even know that down payment assistance (DPA) programs exist? You’re in good company if you don’t,” said The Mortgage Reports. “These programs help homebuyers with loans or grants that reduce the amount they need to save for a down payment. And there are more than 2,000 of them nationwide.”
2. Check out statewide programs.
From the HUD site, you can search by every state plus the District of Columbia, Puerto Rico, and the U.S. Virgin Islands to see which programs are available for you.
3. Now take it local.
Don't forget to check for programs in your city. For example, Covington, Kentucky offers individuals a Homebuyer Assistance Program, which helps individuals afford the down payment, as well as other customary settlement charges to make home buying affordable.
4. Search by your profession.
If you’re a current or former member of the military, you likely already know about VA loans. Did you know they require no down payment?
The Neighbor Next Door Program is another good one. This program for law enforcement officers, firefighters, emergency medical technicians, and teachers requires only a $100 down payment for eligible homebuyers. Because the program is tied to the idea of revitalization, homes in these communities are offered to eligible buyers at a 50% discount. Buyers must commit to living in-home for at least three years.
Bob Abner is a highly respected, top producing, full time, Realtor for over 30 years and is an expert in the Northern Kentucky real estate market.
Give Bob a call at 859-760-1660
Email Bob at BAbner@huff.com
Visit Bob's Website: http://www.bobabner.com
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