Down payment assistance for mortgages – what is it, how do I qualify for it, and what RHF programs offer it? We’re going to show you all that and more in this post.

With an inflated economy and housing market, many first-time and millennial homebuyers in the Garden State are struggling with the hope of purchasing a home in the next few years. In fact, a recent study shows saving enough for a down payment was a top concern for 50% of millennial homebuyers.

Many of these potential buyers have the common misconception that you need 20 percent down to purchase a home. In 2017, the average down payment for the New Jersey area was actually closer to 10 percent. This misconception along with an increased cost of living has led over 65 percent of millennials to seek a secondary income source.

Traditionally, down payments have been 20 percent of the home’s asking price – but a lot of buyers are unaware that they may qualify for down payment assistance. These assistance programs make it possible for individuals to buy a home with less or no money up-front.

Down payment assistance for mortgages can come from a local/state housing authority, nonprofit, a lender depending on the type of program. These support programs provide you with the money needed for a down payment on a mortgage loan.

There are three types of down payment assistance programs:

• Grants:This type of assistance never has to be paid back.
• Loans:You eventually pay back a loan but sometimes these loans are interest-free.
• Tax credits:You get a tax credit, which saves you money that you can then use for a down payment.

You may not qualify for every type of program; many have income requirements or are only available for first-time homeowners. Luckily, there are also programs available specifically for those that have already owned a home or buyers with lower credit scores.

RH Funding offers several different mortgage programs that require no money down. Here are a few of the current programs available for those unable to save 20 percent down:

• USDA Home Loans: A zero down payment mortgage for rural and suburban homebuyers.
• VA Loans: Home loans provided by the U.S Veterans Administration that require no down payment.
• HomeReady and HomePossible Programs: Both of these programs are affordable ways for first-time buyers to put less money down.
• FHA Loans: This type of loan is best suited for buyers with lower incomes or credit scores and allows down payments as low as 3.5%.

If you are hoping to learn more about down payment assistance programs, please contact us for more information. While you’ll still be subject to credit and other eligibility requirements, down payment assistance programs allow many millennial and first-time buyers to imagine homeownership in the future.

Do you have questions about down payment assistance and want to speak with a licensed loan officer in your area at no cost to you? Hit the red ‘Apply Now’ button below and we will answer any questions you have.