You might know that you’ll need some kind of down payment to buy a house these days, but you might not know about all of the programs available to help keep that down payment low if you don’t have 20% (or even 10%) to put down. Down payment-assistance programs like these are saving homebuyers an average of $5,965 on down payments for medium-sized homes.
The days of needing to put down 20% of the price of a home are gone. The average now is closer to 10%, and with some of these programs, homebuyers are putting down 4% and even just 2% of the purchase price. Here are a few you should know about…
- Neighborhood EdgeSM Closing Cost Assistance: Available exclusively through PrimeLending, this program offers up to $1500 in closing cost assistance to qualified homebuyers in all 50 states. Not every house applies for this program, so take a look at the program website for more information.
- Conventional 97 and HomeReady™: These Fannie Mae programs allow for a 3% down payment. Conventional 97 is great for a single-family, single-unit household, whereas HomeReady™ is more for multi-generational households. If multiple people are contributing to the family income, then HomeReady™ might be perfect for you. In addition to the 3% down payment, this program also offers discounts on mortgage insurance and rates.
- FHA Loan Program: The Federal Housing Administration offers programs that will allow for a down payment of 3.5% of the price of the home. One big reason many people choose this option is that FHA mortgage rates are often better than conventional rates.
- 203K Renovation Loan: If you plan on making your first home a fixer-upper, the 203K Renovation Loan might just be perfect for you. This loan only requires a 3.5% down payment, and the amount borrowed can cover both the value of the property plus any costs for repairs. This is a great option for buying a house without much down payment and turning it into your dream home.
- VA Loan Guarantee: For veteran and active duty military, there is a special loan that actually doesn’t require a down payment. No matter how much or little you plan to put down, there is no mortgage insurance charge.
This is just a small selection of the many down payment assistance plans available. For information on other options, including Freddie Mac options or USDA Home Loan that applies to more rural areas and the suburbs, check out the PrimeLending blog, or contact the experts at Coldwell Banker Heritage Realtors for step-by-step assistance in buying your next home.