News

Buying a home is a significant financial decision, and saving for a down payment can be one of the biggest challenges. Fortunately, down payment assistance (DPA) programs can make homeownership more accessible by helping cover a portion of the down payment.

How DPA Programs Simplify Your Homebuying Journey

DPA programs provide financial support in the form of grants or low- to no-interest loans, typically covering 3% to 5% of the home’s purchase price. This reduces the amount you need to save upfront, making it easier to manage the initial costs of buying a home. By lowering the down payment requirement, these programs can also reduce your overall loan amount and monthly mortgage payments, while broadening your options for homes and neighborhoods that might otherwise be beyond your reach.

Getting Started: Eligibility and Application

To qualify for DPA programs, you generally need a credit score of at least 640 and a debt-to-income ratio of 45% or less, along with meeting specific income limits. Many programs also require completing a homebuyer education course. Eligibility requirements vary by state, with some programs tailored to specific groups such as government employees or veterans, and most targeting first-time homebuyers. For detailed eligibility information and to apply, visit your state or local housing authority’s website.

Options for Higher Earners: Alternative Assistance

If your income is higher and you don’t qualify for standard DPA programs, other options might be available. For instance, the Freddie Mac BorrowSmart Access Special Purpose Credit Program (SPCP) offers a $3,000 grant to households earning up to 140% of the area median income (AMI), with $1,500 of this grant being taxable. Availability varies by region. The FirstHome+ program provides assistance in high-cost areas by waiving certain loan terms and fees for households earning up to 120% of the AMI, making expensive markets more affordable.

If you or someone you know is interested in buying a home but struggling with the down payment, call me today to explore your options.

Down Payment Assistance