Question:

What types of down payment assistant programs exist?

Answer:

Down payment assistant programs are special plans allowing the borrower to have the mortgage down payment and eligible closing costs covered for them. DPA programs are of different type and have different requirements.

Common Down Payment Assistant Programs

National charities - these are the easiest DPA grants to qualify for. A down payment assistant counselor will help you determine the right program for your area, or you could contact the charitable organization yourself.

Government subsidized assistance grants are more difficult to comply with. The homebuyer may be requested to undergo a home ownership counseling course, or supply a small percentage of the loan amount to the home purchase. Also, some of those government DPA programs can be available to specific locations only, and may have income requirements.

A forgivable loan is a type of down payment assistant program demanding that the borrower lives on the property for a period of 3 to 15 years. If the borrower moves out, the loan is not forgiven and has to be repaid at high rates for the time the borrower did not inhabit the property as required.

401K can be used with a down payment assistance purpose. However, there may be restrictions and penalties for using funds from your 401K, and your retirement plan will not grow as much as it could. There will be more loan programs allowing down payment assistance through a 401K than the other down payment assistant programs mentioned above.

Mortgage rates hit their lowest since 1955. Ask the home loan experts we recommend Quicken Loans how to take advantage of them.
Was this Mortgage QnA helpful?
Not at all
  • Currently 2.9/5 Stars
  • 1
  • 2
  • 3
  • 4
  • 5
Definitely
Add to this Answer

Mortgage QnA is not a common forum. We have special rules:

  • Post no questions here. To ask a question, click the Ask a Question link
  • We will not publish answers that include any form of advertising
  • Add your answer only if it will contrubute to the quality of this Mortgage QnA and help future readers
If you have trouble reading the code, click on the code itself to generate a new random code. Verification Code Above:
Bookmark and share this QnA: