You've found your first home and your lender has approved you for a mortgage. But there's one catch – you’re short of the cash you need for a down payment.
You're not alone. A great place to start for assistance is right where you live. Many state, county, and city governments provide financial assistance for people in their communities who are well qualified and ready for homeownership.
To provide a better perspective on what "help" means, let's look at two assistance programs in action: Invest Atlanta offers up to $40,000 in mortgage assistance to qualified buyers who buy a home within the city limits; and Neighborhood Partnership Housing Services, Inc. offers up to $18,000 in mortgage assistance to qualified buyers who buy a home within Riverside and San Bernardino counties. Would these type of funds help bridge your down payment gap?
Working through your state, local, or city government, you may be eligible for:
- Grants: Funds that you do not need to pay back as long as you own and live in your home for a specific period of time.
- Second mortgage loans: The most common down payment source, these have low or no interest rates and the payments are deferred over a specific time period.
- Tax credits: Certain states and local governments, including Housing Finance Agencies, issue mortgage credit certificates which reduce the amount of income tax you pay, thus giving you more available income upfront to make your down payment or pay for closing costs.
- Reach out to your lender or real estate professional and ask them about state and local down payment assistance programs – they should be able to point you in the right direction.
- Do your own homework by researching the city, county and state programs in your area and find out what type of help is available. A directory of state, county, local, and municipal programs is available online through the U.S. Department of Housing and Urban Development (HUD).
Thousands of dollars of homebuying assistance is out there for qualified homebuyers like you. Remember, you can’t get help unless you ask.
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