What You Need To Know About Today’s Down Payment Programs

June 28, 2024 by First Federal Bank

There's no denying it's gotten more challenging to buy a home, especially with today's mortgage rates and home price appreciation. And that may be one of the big reasons you’re eager to look into grants and assistance programs to see if there’s anything you qualify for that can help. But unfortunately, many homebuyers feel like they don’t know where to start. 

A recent Bank of America Institute study asked prospective buyers where they lack confidence in the process and need more information. And this is what topped the list:

53% said they need help understanding homebuying grant programs.

So, here’s some information that can help you close that gap.

What Is Down Payment Assistance?

As the Mortgage Reports explains:

“Down payment assistance (DPA) programs offer loans and grants that can cover part or all of a home buyer’s down payment and closing costs. More than 2,000 of these programs are available nationwide. . . DPA programs vary by location, but many home buyers could be in line for thousands of dollars in down payment assistance if they qualify.”

And here’s some more good news. On top of all of these programs, you probably don’t need to save as much for your down payment as you think. Contrary to what you may have heard, typically you don’t have to put 20% down unless it’s specified by your loan type or lender. So, you likely don’t need to save as much upfront, and there are programs designed to make your down payment more achievable. Sounds like a win-win.

First-Time and Repeat Buyers Are Often Eligible

It’s also worth mentioning, that it’s not just first-time homebuyers that are eligible for many of these programs. That means whether you’re looking to buy your first house or your fifth, there could be an option for you. As Down Payment Resource notes:

You don’t have to be a first-time buyer. Over 39% of all [homeownership] programs are for repeat homebuyers who have owned a home in the last 3 years.”

Additional Down Payment Resources* That Can Help

Here are a few of the down payment assistance programs that are helping many buyers achieve their dream of homeownership, even now:

  • Teacher Next Door is designed to help teachers, first responders, health providers, government employees, active-duty military personnel, and Veterans reach their down payment goals.
  • Fannie Mae provides down payment assistance to eligible first-time homebuyers living in majority-Latino communities.
  • Freddie Mac also has options designed specifically for homebuyers with modest credit scores and limited funds for a down payment.
  • The 3By30 program lays out actionable strategies to add 3 million new Black homeowners by 2030. These programs offer valuable resources for potential buyers, making it easier to secure down payments and realize their dream of homeownership.
  • For Native Americans, Down Payment Resource highlights 42 U.S. homebuyer assistance programs across 14 states that ease the path to homeownership by providing support with down payments and other associated costs.
  • First Federal Bank Buyer’s First Down Payment Assistance Program**, provides $7,500 to cover up to 100% of down payment and closing costs, or $10,000 for employees (as well as the un-remarried spouses of employees who are deceased) in any of these industries: military (active duty, retired and reserves), law enforcement, corrections, and education (public and private). 

**To qualify, the property must be used as a primary residence, located in a Majority Minority Census Tract (MMCT) within the approved Florida Counties: Clay, Duval and Marion. The applicant's income must be 100% or less of the county Area Median Income (AMI). Restrictions may apply. Program not available in all areas. Nothing herein is or should be interpreted as an obligation to lend. Loans are subject to credit and property approval.

*These are examples of down payment assistance programs that are subject to change without notice, and are not affiliated with or guaranteed by FFB.

If you want more information on any of these, the best place to start is by contacting a First Federal Bank Loan Officer. They’ll be able to share more details about what may be available, including any other programs designed to serve specific professions or communities. Even if you don’t meet the criteria for these particular programs, they can help you identify other federal, state, and local options that you should explore.

Bottom Line

Affordability is still a challenge, so if you’re looking to buy, you’re going to want to make sure you’re taking advantage of any and all resources available.

The best way to find out what’s out there is to connect with a trusted First Federal Bank Loan Officer.

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