Struggling to Come Up With a Home Down Payment? There are Programs that Can Help.

By Rachel Puryear, Realtor with Berkshire Hathaway, (DRE 02099554), Legal Consultant, and Mortgage Loan Originator (NMLS 2019354)

One of the most difficult stumbling blocks for people trying to buy their first home, is coming up with the down payment. Fortunately, there are a wide variety of programs that can help with that.

Cloth sack of money with “Down Payment” written on the front.

You Might Not Need as Much as You Think:

For starters, there is a common belief that a homebuyer must put up at least 20% of the purchase price as a down payment. This is not necessarily so.

Click here for a great list of 11 First-Time Homebuyer Programs and Grants, many of which allow for a down payment as low as 3% or 3.5%. Let’s say you buy a home which costs $500K – 20% down is $100K, but 3% or 3.5% down is only $15,000 or $17,500, respectively. That’s a big difference!

Note: For the purposes of these programs, a “first-time homebuyer” is defined as someone who has not owned and occupied a home during the past three years (from the date of purchase). This is the case even if someone has actually owned real estate before. Unlike virginity, you can get your first-time homebuyer status back after a while.

If You Still Need More Help, There Could Be More Available from Your State:

Your state might also be able to help you with your down payment. Click here for a list, or here for another list, of down payment assistance programs by state. Click here to go directly to California’s down payment assistance page.

HomeFundIt Helps You Crowdfund for Down Payment Contributions:

If you are lucky enough to have friends and family willing to help bankroll your down payment, you can set up a crowdfunding campaign through HomeFundIt. Afraid no one will contribute? Well, you don’t really know until you ask, and you might be pleasantly surprised. If you’re shy about asking, this could be a great motivation to get out of your comfort zone. Note that contributors can make outright gifts to you, or make their contribution contingent on your purchasing a home. Remember to pay it forward someday! Also, scroll down to the bottom of HomeFundIt’s page (using the above link) to see a fantastic Closing Costs Grant Opportunity!

Hopefully, the availability of these options takes away some of the fear and sting around coming up with a down payment. If you or someone you love is interested in buying a home for the first time, my team would be happy to assist, and talk with you about your options.

Thank you for reading, following, and sharing! Stay safe out there.

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