- Home
- News
- Opinion
- Entertainment
- Classified
- About Us
MLK Breakfast- Community
- Foundation
- Obituaries
- Donate
11-09-2024 10:44 pm • PDX and SEA Weather
MLK Breakfast
For Black consumers and first-time homebuyers, saving for a down payment can be a significant hurdle. Families and individuals can often manage a monthly mortgage but lack the upfront resources for a down payment. However, crucial programs are available that can assist homebuyers with their down payments, making homeownership more accessible.
The National Association of Real Estate Brokers (NAREB) provides a blog to answer questions about down payment assistance programs and encourage more potential home buyers, including Black consumers, to identify and use them. Black consumers must be made aware that these programs are available. Down payment assistance programs are usually funded by local, state, or even federal agencies that funnel the funds to institutions they partner with, expanding inclusivity in the homebuying process.
These programs can come in the form of loans or grants, depending on the specific program. Eligibility for these programs can differ. Often, you can earn no more than 80% of the area median income to qualify, but some programs allow up to 120% of median income.
BMO Financial Group works with NAREB on a Homebuyer Assistance Program for Historically Black Colleges and Universities (HBCU) and Predominantly Black Institutions (PBI) graduates. The program offers homebuyers $6,000 in down payment assistance and can be layered with other programs to receive up to $20,000 or more in assistance. Eligible homebuyers must purchase their home in BMO's footprint, including, but not limited to Chicago, Los Angeles, San Francisco, Denver, Milwaukee, Phoenix, Minneapolis, and Indianapolis.
NAREB partners, Bank of America and Wells Fargo, also offer impressive down payment assistance programs.
To help consumers, here are some FAQs on down payment assistance:
Down payment assistance refers to programs designed to help homebuyers cover the cost of their down payment through grants, loans, or other financial aid. These programs are often aimed at first-time homebuyers, low-income individuals, or those purchasing in specific areas.
Eligibility for down payment assistance can vary widely depending on the program. Generally, factors such as income level, credit score, property location, and whether the applicant is a first-time homebuyer are considered. Each program will have its specific criteria that must be met.
The application process typically involves completing an application form, providing documentation to prove eligibility (such as income statements and credit reports), and sometimes attending educational courses on homeownership. It is essential to check the specific program requirements you are applying to.
Yes, down payment assistance can come in various forms, including grants (which do not need to be repaid), forgivable loans (which are only repaid if certain conditions are not met), and low-interest or deferred payment loans. The type of assistance available will depend on the specific program.
Some programs offer grants that do not need to be repaid, while others provide loans that may need to be repaid through monthly payments or when selling the home. Forgivable loans are loans that do not need to be repaid if the homeowner meets certain conditions, such as living in the house for a specified period.
Sometimes, down payment assistance can be used with other homebuying programs, such as first-time homebuyer incentives or tax credits. It is essential to consult with a mortgage advisor or housing counselor to understand how different programs can work together.
Eligibility criteria for down payment assistance programs vary widely depending on the program and location. Common factors often considered include the applicant's income, credit score, employment history, and whether they are a first-time homebuyer. Some programs may also consider the location of the home being purchased and the overall cost of the house. It is crucial to review the specific requirements of each program to determine eligibility.
Down payment assistance can positively impact the mortgage approval process by reducing the money a buyer needs to save for the initial down payment. Buyers may qualify for better mortgage terms and lower interest rates by having additional funds available. However, each lender may have different policies regarding the use of down payment assistance, so it is essential to inform your mortgage lender about any help you plan to receive and understand how it will be factored into your mortgage application.
Some down payment assistance programs restrict the types of properties that qualify for assistance. These restrictions can include limitations on the purchase price, the property's location, and the home's condition. For example, some programs only offer assistance for single-family homes, while others might cover multi-family units or manufactured homes.
Additionally, certain programs might prioritize homes in specific geographic areas or those that require rehabilitation. Always check the program's guidelines to ensure your desired property meets the criteria.
There are several ways to find down payment assistance programs in your area. Start by contacting local housing agencies or non-profit organizations specializing in homeownership assistance. Many states and municipalities have websites with information about local programs.
Additionally, speaking with a NAREB Realtist, mortgage advisor, or real estate agent can provide valuable insights into options. Online databases and resources like the HUD website may also have comprehensive lists and details about various assistance programs. You can go to https://downpaymentresource.com/ for help in finding down payment assistance programs in your area.
