What is Down Payment Assistance?

A lot of first-time homebuyers are eligible for down payment assistance – but most don’t even know that it’s available.

So what is down payment assistance, and could you take advantage of it to buy your first home in Lakewood or Long Beach?

What is Down Payment Assistance?

The term down payment assistance refers to help through grants, loans, tax credits and other programs that assist buyers in coming up with enough money to put a down payment on a home. They’re not all for first-time homebuyers, but the majority of them are. However, sometimes you count as a first-time homebuyer if it’s been a while since the last time you purchased a home.

The 3 Types of Down Payment Assistance

The three types of down payment assistance programs are:

·         Loans, which you eventually pay back

·         Grants, which you don’t have to pay back

·         Tax credits, which is a roundabout way of coming up with down payment money

A Word on Tax Credits

If you get a tax credit as a form of down payment assistance, you won’t get actual cash. Instead, you’ll get a break on your tax bill, which theoretically helps you save money for your down payment.

How Down Payment Assistance Programs Work

Every down payment assistance program has a set of rules, and you must qualify to be eligible. Usually, this is how they work:

·         You apply for assistance and show your income or demonstrate need

·         A person in the organization offering assistance reviews your application

·         The organization determines whether you – and the home you want to buy – qualify for assistance

·         If you’re approved, the organization applies the money to your down payment

Who Funds Down Payment Assistance Programs?

In many cases, funding for down payment assistance programs come from state and local housing finance agencies. Sometimes they get grants from the U.S. Department of Housing and Urban Development, and sometimes they come from employers, state and local governments, or even community organizations.

Are You Selling a Home in Lakewood or Long Beach?

If you’re selling a home in Lakewood or Long Beach, we can help. Call us at 562-882-1581 to find out how we’ll market your house to all the right buyers so you can sell it quickly and at the right price.