Down Payment Assistance - Grant That Is Never Repaid By The Homebuyer!

There are national charities dedicated to assisting homebuyers with their down payment and closing costs.

Buyers can receive a free gift under these programs. Gift amounts vary with each program but are generally available in amounts of 3% with some programs, all the way up to $22,500 with others. They are mostly only accepted when using an FHA loan. The biggest advantage is that the Buyers never have to repay these gifts.

These gifts or grants are the easiest to qualify for, however qualification guidelines do vary with each program. Each program requires that buyers must qualify for any eligible loan program (mainly FHA) and that the seller agree to work with the charitable organization in the form of a matching gift plus a service fee after the closing. That is why we strongly recommend that you and your realtor work with the charitable organization or one of our Down Payment Assistance Counselors to assist you in putting together the contract offer.

Other types of DPA programs are in the form of government subsidized grants. They will tend to have stricter qualifying requirements such as, requiring that the buyer complete a Home Ownership Counseling Course or provide 1% of their own funds into the transaction. In addition some programs have income/asset restrictions, are only eligible in targeted zip codes, and the most common is what is called the "forgivable loan". It will require the home buyer live in the home for a specific time period before the loan is forgiven. Time periods range from 5 - 15 years. If the home buyer moves with the time frame, the loan must be paid back. Some programs will pro-rate the amount to be paid back based on the length of time the home buyer lived in the home. The biggest disadvantage is some programs will also charge a much higher interest rate on the forgivable loan. We do not recommend these programs that require 15 years of residency or charge higher interest rates. Please be sure to ask for all of the details from these programs before you apply.

These programs generally participate with conforming loan products. Most of these programs do not underwrite the loan or add any cost in the form of points, fees, etc., they simply provide the gift for the down payment and/or closing costs.

These down payment assistance programs can be used for Single Family (1-4 unit) homes, Manufactured/Modular Homes, Condominiums, Townhouses, Existing or New Construction, Rehab and Non-Conforming.

If you interested in applying for a non profit organization down payment assistance grant you can simply fill out our Down Payment Assistance Application.