Down Payment Assistance Programs You May Not Know About

Interestingly, approximately 80% of initial home buyers are eligible for down payment assistance programs. However, only a mere 13% utilize this offer. If you’re considering buying a home, this is an essential difference that you must understand – and quickly.

Let’s discuss maximizing your down payment potential in the current housing market.

For newcomers to the real estate market, the key to optimizing your down payment lies in utilizing all the assistance programs available to accelerate your journey toward home ownership.

Amazingly, there are loan options that require as little as a 3% down, and in certain cases like for Veterans, 0%. Moreover, don’t overlook the value of down payment assistance through various grants and opportunities that aid you in covering your down payment’s initial cost.

If these options have piqued your interest and you’re wondering how to use them to your advantage, the solution is to engage a reliable lender. Failing to explore these beneficial programs might lead to missed opportunities in home buying and potential financial losses. This additional support can significantly add to your down payment and could potentially decrease your eventual monthly mortgage payments, or even reduce or eliminate fees like private mortgage insurance.

One key point to remember is that recent news stories depicting rising down payment rates should not deter you. Just because the average down payment is increasing, doesn’t imply that the down payment requirements are also soaring. This is vital to clarify. The rise could be attributed to individuals opting to make larger down payments to counterbalance higher mortgage rates. Additionally, current homeowners are capitalizing on their equity to increase their down payment on their next home.

Let’s delve deeper into this:

1. Larger down payments contribute to lower monthly mortgage payments. Given the current affordability challenges, those capable of making a larger down payment will do so to decrease future housing expenses.
2. Homeowners are leveraging a record volume of equity. Any person who purchased a home a few years ago has since experienced a significant increase in their house’s value, thanks to home price appreciation. Such individuals can put down much more than an average first-time buyer who has never owned a home.

Different Types of Down Payment Assistance

There are four main types of down payment assistance:

1. Grants – Gifted money that never has to be repaid.
2. Loans – Second mortgages that require monthly payments along with your primary mortgage.
3. Deferred Loans – Second mortgages that only require repayment if you move, sell, or refinance.
4. Forgivable Loans – Second mortgages that are forgiven over a set number of years, typically five to 20 years. If you sell, move, or refinance before the set period ends, repayment may be required.

Down Payment Assistance Programs in Nevada

The State of Nevada Housing Division’s Home Is Possible (HIP) program can provide up to 4% of your loan amount for a down payment and closing costs in the form of an interest-free loan.

To be eligible for HIP, you must:

• Be a first-time homebuyer (not have owned a home in at least three years)
• Have a minimum credit score of 640
• Use the home as your primary residence
• Meet your lender’s financial requirements for the mortgage