Surveys show that most Americans would prefer to own their homes. Many of them are sick of living in apartments or condos that they do not own, leaving them with no financial investment in their living quarters. 84% of people aspire to own their own homes, while only 60% of people are owners of some time of living establishment, either a home or a condo.
So why aren't more people homeowners? Most people can afford mortgage payments; in fact mortgage payments can often be cheaper than renting costs. The honest reason is that most people struggle to save or afford the down payment or closing costs that come with purchasing a home. Many people just can't afford to save thousands of dollars in budgets that are already stretched.
There are some options for those who just cannot afford the large down payment. Here are a few programs offered, for which most people can be qualified.
FHA Loans
While these are not technically an assistance program, meaning there is no program you sign up for for that will pay for your down payment, these loans can be offer little or no down payment options. An FHA loans means that when you take out a loan (mortgage) the Federal Housing Administration (FHA) insures your loan in case you enter into default and cannot pay. Because the government insures the loan, the independent mortgage lenders feel confident allowing you to pay little to no down payment
How do you qualify?
-You must be able to demonstrate a history of payments and meeting financial obligations, either through your credit report or with proof of current bills with a positive payment history
- You must still meet standard loan requirements, meaning you must have enough income to afford your current debts, and be able to afford adding a mortgage payment. For most people, this is not a problem, as they are already paying rent payments.
- You must be able to pay closing costs. Often the costs amount to 2-3% of the home's price. It is possible to finance and roll your closing costs into your loan
- Simply meet with a mortgage/loan officer and ask for FHA loan requirements
FHA loans offer assistance with down payments by either paying for most or all of the down payment. You do not need a specific credit score, or income guideline
You might be wondering why the government even offers these programs.. it almost seems like free money! Well of course nothing is free. But, in the long run, home ownership benefits the economy, and creates a stabilizer
Now FHA loans are a big buzz term that get used for first time buyers. But FHA is not your only option for home buying assistance. There are government and private grant options to assist buyers. To find out more about any of these, ask your mortgage lender.
American Dream Grant Program
- You must not make more than 80% of the local median income average
- Must be a first time home buyer
- Maximum $10,000 grant amount for down payment
- Can be used for down payment, fees, closing costs
The program is administered through HUD, the Housing and Urban Development program through the Federal Government
AmeriDream
Not to be confused with American Dream. Ameridream is an independant, non-profit entity, that offers up down payment amounts, usually 2-5% of the total cost of the house, The maximum house cost is $322, 700.
Homes for All Program
No geographic restrictions, no limit on income or assets
Nehemiah Program
The oldest grant program available
