Typically a minimum of 20% downpayment is required for most home purchases. But, what is a potential buyer to do when cash is simply not available to them? Luckily, across the United States, the emergence of a number of key Down Payment Assistance Programs have made the dream of home buying more likely than ever.
Down Payment Assistance Programs can be administered by a local or state housing authority, a nonprofit organization, or directly through a lender. Down Payment Assistance Programs are available in one of three forms – a grant, an interest-free loan, or a debt you pay off in the future.
Who Qualifies for Down Payment Assistance?
Every state has slightly different rules on who qualifies for Down Payment Assistance but two factors that are considered include your income and the amount of home your are purchasing. Earning limits – for example, can vary from 80% of the area median income in one state but can be as high as 120% in another. Similarly, other states may only make this type of assistance to first time home buyers only.
How much of a down payment can I get?
The amount of funding available varies from state to state and the rules on how each state awards the assistance also varies. That is to say, that for some states, the amount awarded for assistance can be based on the home’s sales price or simply on a flat amount that is capped.
Does my credit matter when looking for Down Payment Assistance?
Of course your credit matters. But, these programs are designed to provide a home purchase option to folks who would otherwise not have one. Your credit worthiness is still checked and remains a factor in qualification.
What is the NJHMFA Down Assistance Program?
The NJHMFA state-wide Down Payment Assistance Program (DPA) provides $10,000 for qualified first-time homebuyers to use as down payment and closing cost assistance when purchasing a home in New Jersey. The DPA is an interest-free, five-year forgivable second loan with no monthly payment.
Wondering if you qualify? Common sense lending is back. Let one of Heritage Mortgage loan specialists assist you in determining if a Down Payment Assistance is right for you. Call our offices at 800.959.4622.