down payment assistance

The Down Payment Assistance You Didn’t Know About

 
 

Believe it or not, almost 80% of first-time homebuyers qualify for down payment assistance, but only 13% actually use it.

And if you’re hoping to buy a home, this is a mission-critical gap to close – fast (see graph below):

 
 

Here’s what you need to know to make the most of your down payment in today’s housing market.

Amplify Your Down Payment Potential

For first-time buyers, the name of the game with down payments is making sure you’re taking advantage of all the resources out there designed to help you. And a bunch of them can get you to your goal faster than you may have thought possible.

For example, there are loan options that require as little as 3% down, or even 0% for certain qualified borrowers, like Veterans. And let’s not forget down payment assistance, like grants and other opportunities, that help you cover the upfront cost of your down payment.

If you’re interested in exploring those options and what you may be able to use to your advantage, connect with a trusted lender. Because if you don’t at least see what’s available, you could be leaving money on the table and missing your chance at buying a home. These resources can boost your down payment. And a higher down payment could help lower your eventual monthly mortgage payment, and even avoid or reduce your fees like private mortgage insurance.

Don’t Let News Headlines About Down Payments Scare You

There’s one more thing to address. News coverage has been talking about how the typical down payment is rising. A report from Redfin states:

“The typical down payment for U.S. homebuyers hit a record high of $67,500 in June, up 14.8% from $58,788 a year earlier . . . This was the 12th consecutive month the median down payment rose year over year.”

But don’t let those high dollars scare you. Just because the average down payment is rising doesn’t mean down payment requirements are going up. That’s a key piece of the puzzle to understand. It’s really just because people are choosing to put more down to try to offset higher mortgage rates, and current homeowners who are putting their equity to work are using that to increase their down payment on their next home. As HousingWire explains:

“. . . buyers are putting down a higher percentage of the purchase price to lower their monthly mortgage payment. And buyers also had more equity from their home sales, which gives them more cushion.”

Let’s break those two reasons down a bit:

1. A bigger down payment helps lower your monthly mortgage payment. Affordability has been a challenge for many buyers recently, which is why those who have the ability to make a bigger down payment are going to do so in an effort to lower their future housing costs.

2. Buyers who already own a home have a record amount of equity to leverage. Someone who bought a home a few years ago has gained a significant amount of value in their house, thanks to home price appreciation. These people can put down much more than the average first-time buyer who hasn’t owned a home yet.

Bottom Line

What’s the best thing to do? Talk with a trusted lender about your options. They’ll help you figure out where you stand today and how to access the resources you may qualify for. Because help is out there, you just need to work with a pro to take advantage of it.

Read more at KeepingCurrentMatters.com

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Down payment assistance program helps moderate and low-income families buy homes

As housing prices continue to go up in the Denver metro area, it can be hard to save enough money for a down payment.

However, there are programs to help.

Colorado Housing Assistance CorporationThe Colorado Housing Assistance Corporation provides low interest, flexible loans to low- and moderate-income (80% of the area median income [AMI] in most areas, 115% AMI in Arvada when using the Arvada program) first-time home buyers for down payment and closing cost assistance throughout Colorado. Interested individuals and families start the process by attending a first time home buyer class. 

Learn more here
See income limits here.

Metro DPA

Metro DPA offers down payment assistance as a zero-interest, forgivable 2nd mortgage. And you can make up to $139,500 and still qualify. 

Learn more here.

City/County of Denver

Denver’s Department of Housing Stability (HOST) has a program for first-time home buyers offered by the Colorado Housing Assistance Corporation.

“Denver’s affordable housing strategy includes critical investments at all points along the housing continuum from resolving homelessness to supporting affordable home ownership,” said HOST Executive Director Britta Fisher. “Our down payment assistance program has a strong history of helping hard-working individuals and families to attain the American Dream of home ownership. We’re proud to continue this critical wealth building tool throughout 2020.”

The program offers down payment and closing cost assistance of up to $15,000 to qualifying households that purchase a home in Denver. The program is limited to households earning up to 80 percent of the area median income (up to $52,000 for a single-person household, or up to $66,850 for a three-person household).

Learn more on Denver's Housing website.

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