Down Payment Programs 101: The 3 Most Common Homebuyer Assistance Programs Explained
Down payment help sounds great, but how does it actually work? What process should you follow?
While down payment programs vary greatly by state and community, there are some universal steps that will help you stay on track if a homeownership program is part of your home financing plan. Let’s look at how it worked for one Florida buyer highlighted in Business Insider.
Willy Harris, 24, and his girlfriend used a Florida first-time homebuyer program to purchase a $204,000 new construction home in Jacksonville, FL. The program allows first-time homebuyers within qualified income and purchase-price limits to receive up to $15,000 in secondary financing toward down payment and closing costs. If the homebuyer lives in the home for five years, the secondary loan is forgiven. Harris used a FHA home loan that required a 3% down payment.
They put down a $1,000 deposit to reserve the lot, while the grant covered their $7,750 closing costs and $6,150 down payment. The remaining amount of the grant went toward the principal of the home loan. Because they put 3% down, they also paid a monthly mortgage insurance premium of $109. Their first mortgage payment is currently $1,503 a month.
Harris recommends setting up a budget and savings plan, and researching programs that can give you a boost.
Follow these steps to get the most of using a homeownership program:
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