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Your Guide to Finding Down Payment Assistance Programs

Your Guide to Finding Down Payment Assistance Programs


Your Guide to Finding Down Payment Assistance Programs

Buying a home can be expensive, and saving up a big enough down payment can seem almost impossible. Current rent, utilities, car payments, and other bills can make it difficult to have any money left over to save for a house.

The good news? If you qualify, you can take advantage of some helpful homebuyer’s down payment assistance programs that alleviate the burden of ponying up a large down payment. Sometimes these assistance programs are the difference in being able to get into a home. Here’s what you need to know about these programs, from what it takes to qualify to what they offer you.

VA Loans

What it is
The U.S. Department of Veteran Affairs backs mortgage loans in case of default. This loan program was created to encourage homeownership for active military and veterans. Among the many attractive benefits is the ability to get a mortgage loan with no down payment, unlike a conventional loan that requires 20% down. It also offers limited closing costs, good interest rates, and the borrowers don’t have to pay for expensive private mortgage insurance (PMI), either.

How to qualify
You or your spouse must be active duty military or a veteran who served at least 181 days during peace time or 90 consecutive days during wartime. Reservists and National Guard members are eligible after six years of service. Spouses of service members who died or were disabled during active duty can also qualify. These benefits do extend to same-sex spouses. This loan isn’t a one-time deal, either. You can take advantage of this program as many times as you want.

USDA Loans

What it is
The United States Department of Agriculture backs this loan to encourage homeownership in rural parts of the country. This program is also referred to as a rural development loan and, like the VA loan, offers several rare advantages to the homebuyers who qualify. It provides 100% financing, meaning the buyer doesn’t need to come up with a down payment. They also typically provide lower-than-average interest rates, so borrowers can end up with a more budget-friendly monthly mortgage payment. In addition, a buyer using this program may not have to pay closing costs. USDA usually finances properties that are 2,000 square feet or less and with the market value falling below the area loan limit.

How to qualify
USDA loans are only available in rural areas of the country, so you would need to buy in a ZIP code that is eligible. Luckily for homebuyers with less-then-excellent credit scores, USDA loans will accept and approve loans for lower credit than traditional mortgages. Scores of 640 and above will move through the process with no issues, but borrowers with scores under that may still be able to qualify. Buyers with past foreclosures or bankruptcies may also be able to secure a USDA loan. Requirements include a stable work history for the past 24 months and no recent collections (in the last 12 months). The total monthly payment, including principal, interest, taxes, and insurance, cannot add up to more than 29% of the borrower’s monthly income.

THDA Loans

What it is
The Tennessee Housing Development Agency provides loans for Tennessee homebuyers. Its purpose is to stimulate home building and encourage affordable homeownership. It offers a program to hopeful borrowers that doesn’t require a down payment. The loan spans 30 years and typically offers a fixed interest rate for the life of the loan. The program helps buyers who would likely otherwise not be able to secure a mortgage with any other program.

How to qualify
THDA single family loans are usually extended to first-time homebuyers with very low, low, or moderate income. Borrowers who want to qualify for a THDA loan need to offer a stable credit history with a 640 minimum credit score. They also need to fall under the maximum income limits, which are designated on a county-by-county basis, and be buying a home that falls under the maximum price limits, which are also determined by county. The property must be the borrower’s main residence throughout the life of the loan. Keep in mind that you may be required to participate in homebuyer education courses to qualify for this program.

It can be hard to figure out how to save a down payment and pay for closing costs when you’re thinking about buying a house. These obstacles do not have to deter you from becoming a new homeowner. Research all the options available for down payment assistance, because you can most likely find one that works for you.

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Mortgage Investors Group, based in Tennessee, offers residential financing in a number of states in the southeast, See MIG Service Areas. Terms and conditions to apply to home financing. We want to share with you the loan terms vary based on several characteristics and your financial profile. These include but are not limited to loan program, loan purpose, occupancy, credit history, credit score, assets, and other criteria per loan type. The repayment terms and interest rate may vary from time to time. The terms represented here are based on certain assumptions outlined below and/or noted on the loan outline page. Additional details concerning privacy, program disclosures, licensing specifics may be found at migonline.com Legal Information.

MIG Loan Officers will help gather the information needed for an individual assessment to provide home financing which matches the loan characteristics with your home financing needs based on your financial profile, when you are ready to begin a full loan application. For estimates and general information before that step, the basis for which the mortgage financing information are as follows:

  • Rates are subject to change at any time.
  • Rate locks are available at current terms for 30 to 180 days based on program type, credit profile, property location, etc. which will affect the available rate and term.
  • Rate locks are available at current terms for 30 to 180 days based on program type, credit profile, property location, etc. which will affect the available rate and term.
  • Payments will vary based on program selection, current rates, property location, etc.
  • Not all programs are available in all states.
  • Some loan programs may not be available to first time home buyers.
  • Terms and conditions apply, which may include restrictions or limits per loan program.
  • Information is generally based on primary residence occupancy with no cash out when refinancing.
  • Unless otherwise stated, terms shown are estimates based in part on credit score of 700 or higher; owner occupancy, escrow account is established for taxes and insurance(s); debt-to-income ratio no higher than 43.0%; PMI applies to conventional loan programs over 80.0% LTV; VA,FHA & RD require insuring fees included in loan and/or payment; fixed rate, 30 year term.

An MIG Loan Officer is available to help with your financial details to determine which characteristics apply to your situation for a personalized look into which loan program best fits your home financing needs. Please use the Find a Loan Officer link or reach out to Mortgage Investors Group at 800-489-8910. Equal Housing Lender 1.2020