Saving up enough money in order to buy a house, even with financing, is seemingly harder than ever these days. In fact, adjusting for inflation, the average home today is 73% more expensive than the average home in 1960.
While the path to homeownership might seem narrow in modern times, there are luckily many programs out there designed to assist with a number of the costs associated with buying a home.
Many states across the country have down payment assistance programs, and you can also find federal and local programs, too.
Let’s take a look at 10 states that offer down payment assistance.
The Alaska Housing Finance Corporation (AHFC) offers up to 4% of your new home’s purchase price. If your credit score is particularly poor, though, you may only be able to qualify for 3%. In order to be eligible at all, you must have a credit score of at least 640.
Are you hoping to find a grant rather than a loan? Check out this down payment assistance grant.
The MyHome Assistance Program of the California Housing Finance Agency (CalHFA) offers first-time homebuyers programs that are basically a second mortgage. They offer $10,000 or up to 3.5% of the purchase price of the home, whichever is the lesser amount.
CalHFA defines a first-time homebuyer as someone who hasn’t occupied or owned their home in the three previous years. That means that even people who have owned homes in the past might qualify depending on their circumstances.
The down payment assistance program from the Georgia Dream Homeownership Program (GDHP) is mostly for first-time home buyers. However, people buying in certain “target” counties might still qualify even if this isn’t their first real estate purchase.
You can receive $5000-$7500 towards your down payment as long as you contribute $1000 of your own money towards the down payment. Some people also might be eligible for the Hardest Hit Fund, which can offer up to $15,000.
The home purchase price and your household earnings must not exceed a certain amount in order to be eligible.
The Choice Conventional Program from the Louisiana Housing Corporation (LHC) as well as the Market Rate GNMA Program and the LHC Preferred Conventional Program all offer up to 4% down towards the down payment for qualified applicants.
In order to be eligible, you must have at least a 640 credit score. There are also household income limits for each program.
There are two programs from the Michigan State Housing Development Authority (MSHDA) that each offers up to $7500 to assist with your down payment. These come in the form of interest-free loans that only become due when you sell the house, finish paying down the mortgage, or refinance. This means that there are not any monthly payments.
The two programs are the MI Home Loan and the MI Home Flex.
MI Home Loan
This is a first-time homebuyer program but some applicants who are purchasing and target areas also apply. The home purchase price and your income level have to be within certain limits. Depending on your choice of mortgage, your credit score will have to be at least 640 or 660.
MI Home Flex
In order to qualify for this, you will need a credit score of 660. This program is open to anyone who falls within certain limits for the home purchase price and income level.
For households that have been income that is at or below 125% of the median income of the county, there is NeighborWorks Montana to offer assistance.
This program only operates in counties that don’t have similar programs. You will therefore want to check in with its website, as well as your county’s website.
For people whose income falls below 80% of the median income of the county, there is more generous assistance available. There are a lot of options with this program but also a lot of rules. You’ll want to check into the details at NeighborWorks Montana’s website.
You can receive assistance of up to 5% of the property’s purchase price from the Nebraska Investment Finance Authority (NIFA). This is for people who have not owned a home in the last three years.
This first-time homebuyer program takes the form of a 10-year second mortgage. It comes along with a low interest-rate, though there are caps on the household income in the home purchase price.
8. New Mexico
You can get assistance with down payments and closing costs as a first-time buyer and New Mexico. These come from the New Mexico Mortgage Finance Authority. There are limits to the home purchase price as well as household incomes, however, the limits might be higher if you are purchasing a home in a target location.
9. South Dakota
Both first-time buyers and repeat buyers can receive down payment assistance from the South Dakota Housing Development Authority (SDHDA). For certain eligible buyers, they give out a down payment assistance grant that can be for up to 3% of the opening mortgage balance. However, there will be a slightly higher mortgage rate.
Similar to other down payment assistance programs on this list, there are limits to the home purchase price and your household income.
Both repeat buyers and first-time buyers can get down payment assistance from the Utah Housing Corporation (UHC). Depending on the type of loan you choose, you might be able to get between 4 and 6% of the amount of your first mortgage.
This program is in the form of a 30-year second mortgage. The interest rate for this is 2% higher than your first mortgage’s interest rate. In order to qualify, your credit score will have to be above a certain number.
Down Payment Assistance: Do You Qualify?
While down payment assistance programs are typically designed for people that make less money who are buying less expensive homes, it’s possible that there’s a program that can help you out in your state. It’s worth digging into the various organization’s websites even if you think you won’t qualify, as there might be help out there for you.
Whether you’re looking for a repeat or first-time homebuyer tax credit, loan, or grant, there are a number of options available.
Did you find this article on down payment assistance interesting? If so, be sure to check out the rest of our blog for more fascinating and informative content!