Last Updated on February 9, 2022 by Maggie Sutton
You’re looking for a home, and you know that your down payment is going to be an important – and large – part of the process. But saving for a down payment can take years, so it’s important that you find the right program now. Luckily there are lots of options available for grants or national funding as well different types loans for down payment assistance and programs.
Down Payment Assistance for Heroes
First Time Home Buyer Down Payment Assistance Classes
There are national programs, grants, tax credits, and even discounts from real estate agents and lenders to look to for down payment assistance for heroes. Sometimes it can be hard to even know where to begin!
But, a good place to start is a first time home buyer class. These classes are designed to go over things like:
- personal finances
- credit scores and reports
- the home buying process
- home inspections and appraisals
- property taxes
One of the best resources from these classes is that they generally discuss down payment programs available to you locally. Classes are typically free or have a very minimal cost and take anywhere from 4-8 hours.
Some types of loans require, and sometimes even lenders strongly encourage, you to attend these classes. You can find classes at the city, county, and state level, depending on where you’re looking to buy.
A good place to look for these classes is on your city, county, or state’s department of housing website. If you’re moving to a new area, consider asking your hiring manger, future boss, or someone else at your new job where to look. They might even know of some rarely used down payment resources.
Department of Housing and Urban Development
The Federal Government also offers down payment assistance at the state level. The United States Department of Housing and Urban Development, or HUD, provides funding for states to use in various programs. These assistance programs vary from state to state, so you’ll need to find these resources on your state’s website for housing assistance programs.
HUD also offers The Good Neighbor Next Door Program. This program is designed to revitalize neighborhoods in every state. While it’s technically not a down payment assistance program, the homes available in the Good Neighbor Next Door program are able to be purchased at 50% of their list price!
How it Works
When you buy a home through the Good Neighbor Next Door program, you put an offer on one of their program-approved homes for the full list price. If your offer is approved, your mortgage lender breaks your mortgage into two equal loans. You only need to pay back one of these loans, worth 50% of the purchase price. You do not need to pay payments or interest on the other loan, so long as you live in the home as your primary residence, and don’t sell it for at least 36 months.
To qualify for this home program, you need to be eligibly employed as a police officer or other law enforcement, first responder such as EMS, or a teacher or educator. The house you put an offer on must also be one of the houses that HUD has identified as eligible. You can find the list of houses per state on the Good Neighbor Next Door website. Keep in mind that homes are always being added to the list if you don’t find one in your desired location or that fits your needs.
Down Payment Resource
Another place to look for down payment assistance is through Down Payment Resource. This is an online, comprehensive database of down payment assistance programs. You can enter your information to see the programs available to you. Down Payment Resource has approximately 2,300 programs in their database to automatically match you with.
Low and Zero-Down Loans
Some of the programs for down payment assistance you can qualify for above can also be used with types of loans that offer no or lower down payments. FHA loans, for example, require as low as 3.5% for a down payment with good credit scores.
Even if you have a lower credit score, FHA loans only require at most 10% for a down payment. So at 3.5%, if you’re looking at a $300,000 home, your down payment could be as low as $10,500. Sometimes, you can roll closing costs into your loan too, meaning you’ll need to have even less cash at your closing.
USDA home loans are another excellent option to save on down payments, because they actually don’t require one. These home loans are designed for heroes already living in, or moving to, rural areas. While you might think of rural as a tiny town, USDA recognizes towns and cities as big as 35,000 people as rural. USDA loans have the most requirements to meet for government-backed loan, but if you qualify, these loans are a great option for homeownership.
As we mentioned, there is no down payment requirement with USDA home loans. The loan amount you request can be 100% of the purchase price of the house. Second, there is technically no minimum credit requirement, though a 640 credit score or better tend to have better success. Plus, you can use a USDA loan to build a new home; it does not need to be used on an existing home. You can also use USDA home loans to renovate an existing home.
Homes for Heroes
If you qualify for down payment assistance through your local government, and are able to get a FHA or USDA loan, there are even more savings out there for a hero like you! Homes for Heroes is the largest, nationwide program of its kind. When you sign up, we’ll connect you with a Homes for Heroes real estate affiliate and mortgage specialist.
These affiliates are in your local area, so they know what the housing market is like where you’re trying to buy or sell. There is no obligation, fees, or extra paperwork when you use Homes for Heroes. We simply want to give back to our heroes across the country.
Homes for Heroes has helped over 50,000 heroes save over $95 million on their home transactions. We do this by giving you back Hero Rewards after your closing.
When you use one of our affiliate real estate agents to buy and/or sell your home, you’ll get $700 back for every $100,000 in purchase price as a check. For example, if you buy a home for $300,000, you’d get $2,100 back in cash after your closing. This money can be used for anything, like new furniture for your new home, make repairs, or put in savings. It’s YOUR reward!
Plus, if you work with our mortgage, title and inspection specialists, you can save $500 on lender fees, $150 on title services, and $50 on a home inspection. We also have deals with companies all over the United States for home and career related products and services, like moving companies, carpet cleaners, storage containers, and home security. That adds up to thousands of dollars in additional savings!
Homes for Heroes mortgage and lending specialists can work with any of the down payment assistance you receive. The best part is that regardless of the assistance you receive, you’re always qualified to receive Hero Rewards. It’s the least we can do to say thank you for serving our communities.
Sign up now to get more information from a Homes for Heroes agent. There is no obligation, cost, or extra paperwork for you. Our affiliates are in all 50 states, so connecting you with a local specialist, who is knowledgeable about the market in the area you’re looking, is simple.