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Down Payment

Down payment is one giant step on home buying process that you need to consider very early in the mix of your buying your house.

I am a real estate agent and I will share some of my most coveted tips that can put your foot inside your new home’s door.

You may be aware that to put that piece of Americana to your name, you will need to come up with some kind of payment up front…

Well, please read on that there may be a way that you can put your foot in the door without any money down.

No, this is not a gimmick.

On the other hand, unfortunately, this will not happen to everybody and for all locations and it is not available all the time either.

However if you meet some criteria, there are many areas where you can qualify for down payment assistance (DPA) and/or some grants that you can use to cover part or, sometimes, up to 100% of your down payment without the need that you come up with the money.

These programs are available all over the country and in all different levels of the government: Cities, counties, states and federal.

They all require some diligence in digging around, call the proper places and people – but you can see from the examples I show on my article “grants” just below, on this page - it can bring you a well worth amount of money towards the purchase of your home.


Down Payment

A down payment is expected as part of your home buying process.

I hope you are already pretty advanced on your “home loan application” – or you soon will be in your way.

Facing the financial side is one of the earliest steps I recommend that you cover when you start planning to buy a house.

In any case, when you receive your approval the loan officer that you will be working with will give a “pre-approval letter” telling you and the world how much you qualify for.

This letter will also say if it is going to be a FHA or conventional loan.

It also can be a VA home loan if you are a veteran. In which case, you may qualify for a no-money down purchase. Do check with your loan officer.

There are more tips about down payment and other financing aspects of home buying on my “Financing Process” page, please click here


FHA - Federal Housing Authority

It is possibly the entity that backs the majority of home loans nowadays.

They have their own criteria that will be spread both over to you and the house. Translating, your credit scores (please see my page on the subject) need to meet their criteria and the property you are about to buy also has to pass FHA’s minimum standards.

These all being equal, you can put your foot in the door with as little as 3.5% down payment of the purchase price if you get approved for a FHA loan.

If either you or the house is not approved by FHA standards, the purchase may still go through, if you – and the property – meet the conventional loan market’s criteria.

However your down payment will go up to 20% of the purchase price.

It sounds a bit complicated, I know. But you’d better believe that I am doing my best to simplify it to a few paragraphs what generally needs a lot more explanation.


Down Payment Assistance (DPA)

Until now I have been writing this page from the assumption that you will come with your down payment moneyout of your pocket.

If that is the case, you need to be prepared with some money saved up. It can be either in cash or in assets you will be able to covert to currency in a short period of time… In time for closing!

However, depending where you are and/or the area you are going to buy and/or your line of work and/or depending on your timing, you may be in luck and plug in with a down payment assistance (DPA).

Down payment assistance is, in essence, free money to help you with your home down payment.

Down payment assistance can be available for many reasons.

Oftentimes municipalities or counties want to attract some kind of uniformed professionals like police officers, teachers etc.

However many times there is no specific kind of population – money is just there for the asking.

That is why I always recommend that you ask around. It takes some persistence but it pays off big time.

I worked with a couple that had secured a down payment assistance of 5% of any property up to $140,000 purchase price.

These were just “ordinary folks” who did their homework in the area they would like to live. There were not in particular professional, the money for assistance was open to all.

That is up to $7,000 power bust to your down payment “home buying power”

It is worth repeating again that this funds are NOT unlimited, they are NOT available everywhere or all the time. Look for them often and apply as soon as possible.


Home Buying Grants

Grants are available in many areas and for many different reasons.

As I will show you two examples below:
a) they work and
b) they can be combined.

In Atlanta area there are an abundance of grants. Here are some examples that come to mind:

  • Opportunity Down payment Program
  • Vine City English Avenue Trust Fund
  • IHOP – Atlanta Affordable Home Ownership Program
  • Beltline Affordable Housing Trust Fund
  • Affordable Downtown Condos Program (Atlanta)
  • MAP – Mortgage Assistance Program
  • NSP – Neighborhood Stabilization Program
  • Historic Neighborhood Housing
  • …And Georgia Dream

I am very confident the area you live would have similar programs as well.

There is much more information on my page “HomeGrants


Federal Home Grants

There are also home buying grants that you could check out on the federal level as well.

Please take a look on this site - grants.gov - please click here

This particular site is open to everyone, everywhere in the United States. Please look for home buying grants

It is not a bad site for you to start your quest to secure a home buying grant.

However, I have a especial treat for you: Please see my next entry ADDI – American Dream


The American Dream Down payment Initiative (ADDI)

It was signed into law on December 16, 2003.

ADDI will provide down payment, closing costs, and rehabilitation assistance to eligible individuals. The amount of ADDI assistance provided may not exceed $10,000 or six percent of the purchase price of the home, whichever is greater.

ADDI will provide funds to all fifty states and to local participating jurisdictions that have a population of at least 150,000 or will receive an allocation of at least $50,000 under the ADDI formula.

Eligibility: To be eligible for ADDI assistance, individuals must be first-time homebuyers interested in purchasing single family housing.

So there you are my fellow first-time homebuyers – a great window of opportunity awaits for you with open arms!

Here is the ADDI – American Dream website for you get started in your search – please click here


Georgia Dream

For those aspiring homeowners living in my home state of Georgia, here is my especial contribution to your own quest:

GA Housing Source Brochure PDF please click here

Georgia – Department Of Community Affair – Georgia Dream website - please click here

Elsewhere I have already pointed out some of the many programs available in the Atlanta area, For more info visit my page “Georgia Grants” – Please click here


Home Grants Examples

Here are two examples that will demonstrate that these program work:

BUYER #1- I worked with a lady who had secured these grants / Values:

  • ODPAP = $20,900
  • Vine = $15,00
  • Capitol = $20,000
  • AAHOP =$10,000
  • MAP = $30,000

Grand Total = $95,900

We had a contract for her on a fabulous brand new town home with three stories, 03 bedrooms, 3,5 baths and 02 car garage.

Because the construction was still going on, the finishes were done to her specifications.

The purchase price was $198,500 – it is easy to see that this buyer had done a fabulous homework and secured grants to almost an even 50% of the home price…

Which would bring the “financed portion” in line with her income to be approved by an FHA loan.

Unfortunately we could not close – NOT because of any of the grants, but because she was a co-signer on a loan to her son had defaulted and they could not clear that – even that I plead with her not to loose that wonderful opportunity. : - (

BUYER #2 – I worked with yet another buyer who also had more than one grant she was eligible for – this time, yes, we closed successfully!

We found a fabulous brand new loft in a very secure building with under the building garage – exactly what this young lady had wished for… and we looking up and down for four months till we came to this unit!

The purchase price was $155,000.

We were able to secure these two grants for her:

  • MAP = $30,000
  • ADA East TAD(*) $25,100

Grand Total = $55,100

(*) Atlanta Development Authority / East Tax Allocation District

You may be wondering why we did not get her the other programs afforded to buyer #1…

Well, we tried……Please read my entry below and for complete details please read my page “Grants Examples” – please click here.


There Are Home Buying Grants In All Fifty States

Remember what I have been saying all along: Not all grants are available to everybody… or to all areas… or all the time!

It is crucial that you start early and contact as many of the sources as possible: the buyer #1 started her homework even before she had a place in mind. : - )

It is important to understand that both down payment assistance and grants target is intended for the purchase of primary residence of first time buyer with low and mid income.

The point is that down payment and others home buying grants are available – it is up to the individual to chase them… Are you up to ripe the benefits of this wonderful opportunity? To read more on how you too can do, please click here – “Home Grants”

Thinking about your Down Payment is but one of the ten most important steps that will lead you to a successful purchase of your new home!

Please follow these links to learn more about the other nine steps:      

Credit Check
Free Credit Report
Credit Scores
Loan Application
Buying Power

Home Grants
Home Types
Location
Realtor Hire




JC Fagundes, RE Agent |SERVICE. EXPERIENCE. EXCELLENCE.


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