Down Payment Assistance Programs: What Options Are There, How Can You Apply, & Who Qualifies
Down payment assistance programs are designed to help would-be home buyers that are unable to cover the upfront costs of purchasing a home. There are a number of programs that will cover some, or all, of the down payment; and may also offer help with closing costs. Typically, the money is paid out at closing and handled by the lender.
Understanding the nuances of each down payment assistance program is valuable for those that are looking for help and may qualify. The assistance can come from many different sources – federally, state, county, city, and even nonprofit agencies. Many of these programs aren’t always well-publicized. The range of down payment assistance programs available may vary based on where you plan to buy a home. In the state of Texas, for instance, the Department of Housing and Community Affairs offers an assistance program that covers up to 5% of the down payment and closing costs for eligible buyers.
Generally, down payment assistance programs take one of three forms:
- Down payment grants
- Forgivable second mortgage programs
- Matched savings programs