Down payment assistance programs
You've found your first home and your lender has approved you for a mortgage. But there's one catch — you're short of the cash needed for a down payment. Help may be available.
Where to turn for help
Every year, many state, county and city governments provide financial assistance for people in their communities who are well-qualified and ready for homeownership. Requirements vary, but if you're eligible you could receive down payment assistance ranging from a few thousand dollars to larger amounts, depending on your needs, your qualifications, and where the home is located.
Additionally, many programs specifically benefit veterans, Native Americans, and workers employed in education, health care, law enforcement, and firefighting are available.
Types of help
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Grants - Funds that you do not have to pay back as long as you own and occupy your home for a certain period of time.
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Second mortgage loans - The most common down payment source, many second mortgage loans offered by state and local governments have low or zero interest rates, and the payments are deferred over a specified time span and, in many cases, the loan is completely forgiven over time.
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Tax credits - Certain states and local governments, including housing finance agencies (HFAs), issue mortgage credit certificates, which reduce the amount of federal income tax you pay. This makes more money available upfront for your down payment or closing costs.
