- There are several types of down payment assistant programs available and they are not offered through every lender.
- Some down payment assistant loans are forgivable over time while others must be paid in full upon the sale of the home or refinance.
- Down payment assistance is secured by a second mortgage lien and does not have any interest accrual or payments owed while the loan is in existence.
- Down payment amounts range in the amount of $5,000 to $15,000.
- Occasionally, down payment assistance entities run out of money during the year and are not funded again until the next year.
- Down payment assistance programs are available for owner occupied homes. Investment properties and/or second homes do not qualify for down payment assistance.
- There are income limitations for each type of down payment assistance and the income limitations include total household income.
- Most down payment programs require a minimum contribution of $1,000 from the Borrower.
- Property condition needs to be an important consideration when pursuing down payment assistance.
- It takes longer to close a loan with down payment assistance.
- The credit requirements for down payment assistance are set by the first mortgage loan parameters.
- It is important to work with a loan officer who has experience with down payment assistance.
- Homebuyer education is required for all down payment assistance programs.
Gina Lemelin has been in the mortgage business for over 20 years and brings her years of experience to the table with informative blog posts to help real estate agents, buyers, sellers, investors, financial planners, tax consultants and attorneys.