Down Payment – Assistance, Grants, Programs and Incentives

Down Payment

Complete Information on Down Payment Assistance, Grants, Programs and Various Other Down Payment Incentives

Down Payment 261x300 Down Payment   Assistance, Grants, Programs and Incentives
Down Payment

When thinking about buying their first home, most would-be buyers are somewhat discouraged about having to come up with a sizable down payment. For many people, this is the largest stumbling block of the entire process. It need not be so. Yes, lending requirements are tighter than they were 5 years ago. Yes, coming up with a sufficient down payment is going to be required. And yes, there are a multitude of programs to help you do so, from outright down payment grants to loans featuring below-market interest rates. Just about every state has some form of down payment assistance program, and there are a great multitude of local down payment incentives at the community level. If you’re thinking you’ll never be able to save enough money for a down payment on a house, you’re probably wrong. Read on to discover the contact information for all the down payment programs in your area (our state directory of down payment programs is at the bottom), as well as some general advice surrounding the down payment topic, which we’ll cover next.


General Down Payment Tips and Principles

Do not allocate all of your savings toward the down payment of your new home and the closing costs. With the main focus being on the purchase of you new home, you may forget about additional expenses that come up with moving. Remember that you will have moving expenses as well as additional utility costs for set up. Also remember that you will need to pay closing costs and property taxes as well.

Once creative way for cash challenged buyers be in the market to buy a property is a lease-to-buy or rent-to-buy agreement. In this case the rent payment, or a part of it, goes towards the down payment of the property. These types of deals can be negotiated. You live in a home for a year, the entire time making monthly lease payments of, let’s say $1,000.00. If you can find a seller who will entertain this type of arrangement – and they are out there – you might be able to negotiate 50% of the monthly lease payment going towards the eventual down payment. Thus, after a year, you’ve built up $6,000.00 that will be applied to the down payment. Combine this with other methods, such as getting one of the programs described in our state directory, and you’ll be surprised at how easy it will be to come up with the down payment for a house.

Be truthful with your agent. If you are not serious with purchasing or if you are not buying a house soon, you should let your agent know. Tell your agent about your down payment situation or if you are using more than one Realtor. Your agent will be your face and he or she should know your situation.

When buying a home after a previous home has foreclosed, you may be asked for a larger down payment. In many cases this is usually around twenty percent. The larger a down payment you can put on a new home the lower the interest rate is going to be for your loan. A smaller down payment equates to higher risk in the lender’s eyes, and the lender will charge a higher rate of interest to cover the higher risk.

When trying to come up with a down payment, there are some helpful things that you can be doing. Ask for financial help from your parents, start selling some extra stuff you have lying around that you no longer need, or you can take money out of your retirement funds. Just make sure to pay yourself (and you parents!) back.


More Downpayment Ideas and Guidelines

Know your finances before you start looking. By having an idea of how much you can offer for a down payment and talking to a bank to see how much you can get pre-approved for a loan, you will know what types of houses you will be able to look at.

Before you determine the price range of the house that you will want to purchase, you need to take a look at how much money you have saved up in your savings account. This will tell you how much you can afford to put down as your down payment as well as making sure you would have enough for closing costs and moving expenses.

When you are getting ready to apply for a mortgage, try to make sure that you can document as much of your assets as possible. If you can have a paper trail of where your savings came from as well as what other income will be available after you put down your down payment, it will make it easier for you to get a loan.

Many first-time home buyers make the dire mistake of failing to budget beyond the initial down payment. In most cases, moving and closing costs can account for as much as ten percent of your total loan amount. Prepare yourself by requesting an approximate estimate of costs from your mortgage broker or lender.

If you are having trouble coming up with the down payment for the home that you want, you may want to consider asking your lender about an 80/20 loan. You will be able to get a loan to cover the down payment and another to cover the cost of the home. There are many of these types of down payment loan programs, some that actually are forgiven if you remain in your home for a certain number of years, offered in many states. Check the state directory below to see what is available in your area.

Attempt to get a loan even if you do not have a 20 percent down payment. Although it is common to find loans that require a down payment of this size, there are loans available that will allow you to put down much less. Do your research, and find a lender that meets your individual needs.

Always get a pre-approval letter. Don’t confuse pre-approval with pre-qualification, as they are two completely different things. It’s easy to get pre-qualified, as this doesn’t require anything more than giving a mortgage lender your information. A pre-approval letter is only given after the details have been verified, such as employment details, income, and the source of your down payment. This way, you won’t be disappointed when you make an offer on a house, only to find that you don’t qualify for the loan.

Have a garage sale, or consider selling off some of your furniture or electronics in order to have a down payment for buying a house. You can always re-purchase these things later on after you are in your great new home. Consider it a temporary separation in order to get what you want.


Any one of these tips could be the key to finding a great house at an amazing price – or to avoiding over-paying for a disappointing home. Reading this article is just the beginning of the intelligent buyer’s real estate education. Research and learning should continue all the way through the buying process – a vital tip might come at just the right time. For your benefit, here is our directory of down payment assistance programs in every state:

State Directory of State Down Payment Programs

Alabama: The state of Alabama offers several down payment programs. For information on what is available, please visit Alabama Down Payment Programs.

Alaska: The state of Alaska offers several down payment programs. For information on what is available, please visit Alaska Down Payment Programs.

Arizona: The state of Arizona offers several  down payment programs. For information on what is available, please go to Arizona Down Payment Assistance Programs.

Arkansas: The state of Arkansas offers several down payment programs. For information on what is available, please visit Arkansas Down Payment Programs.

California: The state of California offers multiple state as well as local down payment programs. For information on the program details, please go to California Down Payment Incentive Programs.

Colorado: The state of Colorado offers only one down payment program, but there are plenty of local programs within the state. For information on its details, please go to Colorado Down Payment Incentive Programs.

Connecticut: The state of Connecticut offers one down payment program, and there are multiple programs offered by various cities in CT. For information on the program details, please visit Connecticut Down Payment Programs.

Delaware: The state of Delaware offers a single down payment assistance program. For information on the program details, please visit Delaware Down Payment Assistance Program.

Florida: The state of Florida offers several down payment programs. For information on these programs, please check out Florida Down Payment Programs.

Georgia: The state of Georgia offers several down payment assistance programs. For details on these programs, please go t0 Georgia Down Payment Incentive programs.

Hawaii: The state of Hawaii offers one form of down payment help. For information on the program details, please visit Hawaii Down Payment Assistance Program.

Idaho: The state of Idaho offers two down payment programs. For details on these programs, please visit Idaho Down Payment Programs.

Illinois: The state of Illinois offers one down payment assistance program. For information on the program, please go to Illinois Down Payment Assistance Programs.

Indiana: The state of Indiana offers several down payment programs. For information on these programs, please visit Indiana Down Payment Incentive Programs.

Iowa: The state of Iowa offers many down payment assistance programs. For information on what is available to first time home buyers, please visit Iowa Down Payment Programs.

Kansas: The state of Kansas offers only one form of down payment help, but there are other programs available locally. For details of these programs, please go to Kansas Down Payment Assistance Programs.

Kentucky: The state of Kentucky offers several down payment programs. For information on these programs, please go to Kentucky Down Payment Programs.

Louisiana: The state of Louisiana offers several down payment assistance programs. For details of these programs, please visit Louisiana Down Payment Assistance Programs.

Maine: The state of Maine offers two down payment programs through the Maine State Housing Authority. For details on these programs, please visit Maine Down Payment Incentive Programs.

Maryland: The state of Maryland offers several down payment incentive programs. For details on these programs, please go to Maryland Down Payment Programs.

Massachusetts: The state of Massachusetts offers a variety of down payment incentives. For information on these programs, please go to Massachusetts Down Payment Assistance Programs.

Michigan: The state of Michigan offers only one type of down payment help. For details of the program, please visit Michigan Down Payment Incentive Programs.

Minnesota: The state of Minnesota offers several down payment programs. For information on these programs, please go to Minnesota Down Payment Programs.

Mississippi: The state of Mississippi offers a variety of down payment assistance programs. For information on these programs, please visit Mississippi Down Payment Incentive Programs.

Missouri: The state of Missouri offers two down payment incentive programs through the Missouri Housing Development Commission. For details on these programs, please visit Missouri Down Payment Programs.

Montana: The state of Montana offers several down payment programs. For details on these programs, please go to Montana Down Payment Assistance Programs.

Nebraska: The state of Nebraska offers several down payment assistance programs through the Nebraska Investment Finance Authority. For information on these programs, please visit the Nebraska Down Payment Incentive Programs page.

Nevada: The state of Nevada offers three down payment programs through the Nevada Housing Division. For details, please go to Nevada Down Payment Programs.

New Hampshire: The state of New Hampshire offers several down payment incentive programs through New Hampshire Housing. For information on these programs, please go to New Hampshire Down Payment Incentive Programs.

New Jersey: The state of New Jersey offers several down payment programs through New Jersey Housing and Mortgage Finance Agency. For information on these programs, please visit the New Jersey Down Payment Assistance webpage.

New Mexico: The state of New Mexico offers several down payment assistance programs. For information on these programs, please visit New Mexico Down Payment Programs.

New York: The state of New York offers a variety of down payment programs through the New York State Housing Finance Agency. For details on these programs, please go to the New York Down Payment Incentive Programs webpage.

North Carolina: The state of North Carolina offers several down payment assistance programs through the North Carolina Housing Finance Agency. For information on these programs, please visit the North Carolina Down Payment Assistance Programs webpage.

North Dakota: The state of North Dakota offers a multitude of down payment incentives through the North Dakota Housing Finance Agency. For details on these programs, please go to North Dakota Down Payment Programs.

Ohio: The state of Ohio offers several down payment programs through the Ohio Housing Finance Agency. For information on these programs, please visit the Ohio Down Payment Incentive Programs webpage.

Oklahoma: The state of Oklahoma offers a variety of down payment assistance programs through the Oklahoma Housing Finance Agency. For details on these programs, please visit Oklahoma Down Payment Assistance Programs.

Oregon: The state of Oregon offers several down payment programs through Oregon Housing and Community Service. For information on these programs, please visit the Oregon Down Payment Programs webpage.

Pennsylvania: The state of Pennsylvania offers several down payment programs through the Pennsylvania Housing Finance Agency. For more details on these programs, please go to Pennsylvania Down Payment Incentive Programs.

Rhode Island: The state of Rhode Island offers several down payment incentive programs. For information on these programs, please visit the page for Rhode Island Down Payment Assistance Programs.

South Carolina: The state of South Carolina offers a variety of down payment incentives through the South Carolina Housing Finance and Development Authority. For information on these programs, please visit the South Carolina Down Payment Programs webpage.

South Dakota: The state of South Dakota offers two down payment programs through the South Dakota Housing Development Authority. For details on these programs, please visit South Dakota Down Payment Assistance Programs.

Tennessee: The state of Tennessee offers three down payment assistance programs through the Tennessee Housing Development Agency. For details on these programs, please go to the Tennessee Down Payment Programs webpage.

Texas: The state of Texas offers three down payment incentive programs through the Texas Department of Housing and Community Affairs. For details on these programs, please visit Texas Down Payment Incentive Programs.

Utah: The state of Utah offers two down payment programs through the Utah Housing Corporation. For details on these two first time home buyer programs, please go to the Utah Down Payment Programs webpage.

Vermont: The state of Vermont offers two down payment assistance programs through the Vermont Housing Finance Agency. For details on these two first time home buyer programs, please visit Vermont Down Payment Incentive Programs.

Virginia: The state of Virginia offers a variety of down payment incentives through the Virginia Housing Development Authority. For information on these programs, please visit the Virginia Down Payment Assistance Programs webpage.

Washington: The state of Washington offers several down payment programs through the Washington State Housing Finance Commission. For more details on these programs, please go to Washington Down Payment Programs.

West Virginia: The state of West Virginia offers several down payment assistance programs. For more information on these programs, please go to West Virginia Down Payment Incentive Programs.

Wisconsin: The state of Wisconsin offers several down payment incentive programs through the Wisconsin Housing and Economic Development Authority. For more information on the various first time home buyer programs available, please visit the Wisconsin Down Payment Programs webpage.

Wyoming: The state of Wyoming offers several down payment programs through the Wyoming Community Development Authority. For more information on these programs, please go to Wyoming Down Payment Incentive Programs.


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About Jennifer Cribsly

I'm a former real estate broker who specialized in helping first time buyers be able to purchase a home. Now full time mom, part time real estate owner/investor.
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