If you are a first time home buyer or someone who is looking to own a home again, there are many programs that still exist that can assist you with a down payment to purchase a home. A few years back, Wells Fargo Bank made a huge splash by offering down payment assistance funds to home buyers in Charlotte and the program was a success. However, before and ever since, there are programs to lend as much as $15,000 to the purchase of your first or next home.
Most often, these down payment assistance programs are limited to first time home buyers or former home owners that have not owned a home in over 3 years. Some programs are limited by neighborhood while others are unlimited by geography but household income.
To see what programs you might be eligible for, check out http://downpaymentresource.com/are-you-eligible/.
Some important guidelines to remember when thinking about down payment assistance programs are:
- They are not for home buyers that have bad (sub 600) credit or are currently late on payments.
- They are not for home buyers without an income.
- They are not for home buyers that are currently in foreclosure.
The way that down payment assistance programs generally work is that, once approved, the amount needed in assistance becomes a second mortgage on the property upon closing. The second mortgage usually does not have payments required until after the first mortgage is settled. Some programs will even provide a percentage of debt forgiveness as long as you maintain a level of ownership in the property. In the case where forgiveness isn’t apart of the program, the second mortgage (referred to as a silent second mortgage since payments aren’t due) would be paid in full upon selling the property or paying the first mortgage.