Arranging the amount for a down payment is one of the biggest challenges that most home buyers face when they apply for a mortgage program. However, nowadays, there is relief in the form of a down payment assistance program. With this, you can get down payment assistance and use it for making the payment.
But before you opt for down payment assistance to purchase homes in Texas, you can have a few questions that you want to get answered. Here, we have listed down a few for you –
- Who offers down payment assistance?
Down payment assistance programs are offered through a number of different state and local agencies. Besides, public and private sponsors also offer the same. The common organisations that offer DPA programs are Federal Housing Administration (FHA), U.S. Department of Agriculture (USDA), State Housing Finance Agencies, U.S. Department of Veteran Affairs (VA), City and Count Housing Authorities, Non-Profit Organisations and Employers, and more.
- Who can qualify for down payment assistance programs?
Many can qualify for this. Based on your occupation, location, or special household circumstances, you can qualify for a down payment assistance program. Though various DPA programs are designed for first time home buyers, there are many such programs that don’t have such requirements.
- What are the types of down payment programs?
There are different types of down payment assistance programs that you can apply for –
- Home grants
Grant programs provide help for buyers who are interested in purchasing a home but are not only for first-time home buyers. Qualified buyers who are meeting the program criteria will have no responsibility to pay back granted funds. Mortgage grants are separate from home loans. It is because of this some may be combined with other programs to offer a better incentive to purchase a new home. You can check online whether you can qualify to combine mortgage programs or not.
- Forgivable loans
A forgivable loan is a “soft” second mortgage, which is forgiven when the homeowner meets certain criteria offered by the lender, such as the borrower should remain a particular period of time in the house. Once the homeowner has reached the necessary requirements laid out by the lender, the loan is forgiven. And so, you don’t need to repay the fund.
- Non-forgivable loans
Generally, it is a silent second loan, which requires home buyers to pay back the funds when they choose transfer title, refinance, or sell the home. Besides, they can be repaid at a lower percentage rate. These “secondary” mortgages are often used by the borrowers looking for assistance with the down payment required by the primary mortgage.
- Common programs
In case you are a rancher or farmer and located in a rural area, you may benefit from a USDA mortgage loan or grant. Law enforcement officers, teachers, or firefighters may qualify for special mortgage assistance through HUD programs. Besides, there are assistance programs for government employees and military service members.
As you have a general view of down payment assistance programs, now, start comparing various programs to know which one will be the ideal choice for you and apply for it early.