Arranging cash for the down payment is often difficult for homebuyers. Wondering how to manage this? Well, a down payment assistance program can help you with this. Designed to help homebuyers, these assistance programs offer you financial aid that you can use as a down payment or closing cost.
But what are the assistance programs available? Well, there are many. Most of the programs are offered by HFAs. But there are other programs, which are offered through the country and municipal units of government with guidelines adjusted for local home prices and sincome levels. Eager to know about down payment assistance to purchase homes in Texas? To help you, here we have listed down a few programs –
- Home grants
Home grants are the ideal option for homebuyers who are interested in buying a home but are not exclusive to first-time homebuyers. Qualified buyers who are meeting the program criteria will have no obligation to pay back the granted funds.
As mortgage grants are separate from mortgage loans, some may be combined with other programs in order to offer a better incentive to buy a new home loan. So, check the eligibility and then apply for a down payment assistance program.
- Forgivable loans
Also known as a “soft” second mortgage, this loan is forgiven after the homeowner has met certain criteria mentioned by the lender including a period the borrower should remain in the home.
Once the homeowner has fulfilled the requirements are laid out by the lender, this loan is forgiven. And being a borrower, you don’t need to repay the loan.
- Non-forgivable loans
Generally, these loans are considered as a silent second loan. And it requires the home buyer to pay back the funds when they choose to refinance, as well as transfer title, or sell the home.
These loans can also be repaid at a lower mortgage rate. These “secondary” mortgages are often required when a buyer needs assistance with the down payment needed by the primary mortgage.
- Common programs
There are other programs available to help you fulfill your dream of homeownership. While FHA loans allow first-time homebuyers to purchase homes easily, military service members and government employees may qualify for several programs, such as VA loan programs.
If you live in a rural area, you may benefit from a USDA mortgage loan. These programs are designed to help ranchers, farmers, and homebuyers in less populated areas of the country with mortgage assistance. If you fall in the category, then go on.
So, check the eligibility for various down payment assistance programs and then opt for the one that will be suitable for you.