Whether you have owned a home before or are buying a home for the first time, there are always lots of questions involving what is required for a down payment and how to best source assistance.
- How much do you really need for a down payment?
There is a large misconception about down payment requirements. There are many mortgage loans available that require as little as 3% down for first time home buyers, and some ask for only 3.5% down for repeat buyers. There are even loans available for veterans that provide 0% down payment options.
- How can I help with my down payment?
Regardless of the loans available, many buyers still need assistance with a down payment. There are a lot of down payment assistance options. Here are a couple of them:
Assistance from Family Members
One of the ways to get help with a down payment is to accept a gift from a family member. Make sure you talk to your loan officer before you accept the money to ensure you document the process the way it is required by your loan.
Down Payment Assistance Programs
There are more than 2,500 down payment assistance programs available and some of them are even specifically for first-time buyers. Determine what is available in your area where you ultimately want to live, so you have all the details you need to take advantage of the down payment options. In order to receive a down payment assistance loan, it must be coupled with a first mortgage. Some of these assistance programs in NC include:
NCHFA Down Payment Assistance: zero interest, no payment required loan that is fully forgiven after 15 years.
DPA: Buyer must meet the specific mortgage guidelines of the first mortgage. Available to both first-time buyers or subsequent buyers.
DPA with USDA First Mortgage: Since the USDA is a no money down purchase loan, the down payment assistance could help pay closing costs.
FHA Loans: When you need a no money down program but you are not a Veteran or the property isn’t USDA eligible. Couple an FHA loan with down payment assistance.
DPA with VA: VA loans finance 100% of the purchase price, but may not cover the closing cost. The DPA funds can pay for the closing costs.
Conventional Loan: Allows for buyers to finance up to 97% of the purchase price. The interest free DPA can almost cover the full downpayment.
MCC Tax Credit: NC Housing offers a great tax credit for first-time buyers. The tax credit provides up to $2,000 per year to qualifying buyers.
For more information on down payment assistance and mortgage options, contact: