If you’re in the market for a new home, you may be wondering how to afford your down payment. Don’t worry—there are plenty of ways to get help. In this blog post, we’ll tell you all about down payment assistance and how to qualify for it in 2022.
Most conventional loans require a 20% down payment. In our current economic climate, that’s often too much to save. Even if you’re saving a significant portion of your income, it might take 5-10 years to accrue the cash needed to start the process. Thankfully, down payment assistance programs are designed to help first-time homebuyers acquire a home.
There are two major types of DPA programs. Most often, DPA programs come in the form of loans, where you can borrow a percentage of the home’s purchase price. While these percentages are generally pretty low, they could take years off time spent saving. However, some DPA programs are straightforward grants. Few and far between, these programs do exist, and it’s absolutely worth looking to see if you might qualify. But that, of course, brings us to a couple of important questions:
Where do I find DPA programs?
Local county, city, or state governments are the first place to look. Navigate to your local government website and poke around, or even make a couple of phone calls.
How do I qualify?
While there is no one-size-fits-all DPA program, there are some similarities to be aware of.
Most often, DPA programs are created for first-time homebuyers. If you’ve already purchased a home in your name, you might not be eligible for DPA. DPA is primarily created to help people build equity and put their real estate capital gains towards their next home. All in all, the idea here is to support a long-term building of personal finance.
With this in mind, it should be no surprise that DPA programs are targeted at low-income families, and you might not qualify if your income is above the median average. Different states come with different laws, and it pays to do your research beforehand.
You’ll also need to be applying for DPA with the intent to live in your home, not put it on the rental market.
DPA can only go so far, and if you don’t know if you’ll qualify, the first step is getting a mortgage quote in the first place. At Maverick Mortgage, we’re committed to connecting you with the best lenders, who have the best rates. We know that everyone’s situation is different, and we work hard to help new homebuyers create financial freedom. Contact us today to receive your free rate quote!