If you’ve ever purchased a property, you’re likely familiar with different loan types you can use to finance the purchase. You might prefer a conventional loan if you can afford a 20% down payment or turn to an FHA loan if you’re wanting a 3.5% down payment. Or if, you are a veteran, you may qualify for a VA loan. In any case, you have plenty of options to fit your life situation.
While the above loan types are common, down payment assistance programs are lesser-known to the average homebuyer. Options like grants, seller assistance, down payment loans and USDA loans are all considered down payment assistance programs and can help you get into a home. You might be surprised to learn that there are actually quite a few programs available to help with your down payment. Keep reading to learn more about these unique loan types and how they can benefit you.
Grants
One type of down payment assistance is a grant. Grants are typically given by government entities or non-profit organizations. They do not have to be repaid, making them a great option if you qualify. Qualifications differ for every grant, so be sure to do plenty of research.
Local Financing Agencies
There are also loans available from state and local housing finance agencies. The interest rates on these loans are usually below-market, and they can be a great option for low and moderate-income buyers.
Seller Assistance
Another type of down payment assistance comes from the seller. In this case, the seller agrees to pay a portion of the buyer’s down payment in order to help them close on the property. While this is a situation that does not happen very often, it is possible. If you’re interested in a home and the down payment is the deterrent, consider passing this idea to the seller’s agent.
Down Payment Loans
There are also loans available specifically for the purpose of making a down payment. These loans typically have low-interest rates and may even be deferred until after you’ve closed on your home.
USDA Loans
Perhaps the most popular form of down payment assistance loans, USDA loans are available to buyers in rural areas. These loans offer 100% financing, which means no down payment is required.
As you can see, there are quite a few options available when it comes to down payment assistance programs. Do some research to see if you qualify for any of these programs. You may be surprised at just how much help you can get. You may also wish to consult with your local mortgage broker to determine the best option for you.
