Unusual Down Payment Options
From Crowdfunding to Government Programs
For many first-time buyers, the down payment is a significant barrier to homeownership that can take years to save for — however it’s not an impossible feat. Here are a few creative and unconventional ideas to help you get into your dream home.
Crowdfunding
With websites like Feather the Nest and Hatch My House, buyers can now utilize the power of crowdfunding to raise funds for a down payment. Hatch My House claims they have aided homeowners raise more than $2,000,000 for home purchases.
Ask Employer For Help
Employer Assisted Housing (EAH) programs can assist low to moderate income employees with a down payment through their employer. Ask the human resources or benefits personnel at your employer if your company participates in an EAH program.
Ask Seller For Help
Some sellers may be willing to help buyers with closing costs by accepting seller concessions. However, lenders many times limit concessions depending on the mortgage type: FHA mortgages have a cap of 6% of the sales price, while Fannie Mae-backed loans have caps between 3% and 9%.
Special Lender Programs
With FHA mortgages, borrowers may need just 3.5% for a down payment, though mortgage insurance could make monthly payments slightly higher. Some lenders, such as TD Bank, offer a 3% down payment with no mortgage insurance program. Check with regional banks for possible first-time buyer or down payment assistance programs.
Government Programs
The U.S. Department of Housing and Urban Development (HUD) has several programs, such as assistance with down payment and closing costs, which vary by state. HUD also offers assistance to law enforcement officers, firefighters, teachers and EMTs through its Good Neighbor Next Door Sales Program. For veterans, the VA offers loans that often require zero downpayment or private mortgage insurance. In Florida , the Florida Housing Finance Corporation can sometimes help.
Feeling a little better about that down payment? There’s actually a lot of help available to many first-time buyers who want to achieve their homeownership dreams. All you need to do is a little research — or call us and let us help you!
