homebuyer assistance, freddie mac, fannie mae, mortgage assistance, down payment, low down payment

How to Find Homebuyer Assistance Programs

One of the most significant challenges buyers face is saving enough money to purchase a home. Fortunately, there are numerous programs designed to lower the costs of homeownership and other obstacles. 

Even though assistance programs are readily available, finding the best options takes patience and dedication. If this is your first time searching for help paying for a home, follow these steps.

Step 1: Understand the fundamental differences.

There are many types of homeownership assistance, and you can combine some of them. 

Mortgage programs

Many buyers mistakenly assume they can’t buy a house unless they have a 20 percent down payment and a perfect credit score. But some national mortgage programs like those offered by Fannie Mae and Freddie Mac have lower requirements, allowing your down payment to be as low as three percent of the purchase price.

However, keep in mind that low-down-payment mortgage programs usually add private mortgage insurance (PMI) to your monthly payment.

Down payment assistance (DPA)

These programs make it easier to save up for a down payment on a home. The assistance may take the form of a grant (a gift that never needs to be repaid) or a low-cost loan (a second mortgage on your property). DPAs can also be deferred or forgivable loans. 

Closing cost assistance

The professional fees and other charges associated with closing a home can add up to thousands of dollars. But you may be able to get help with these expenses too. The aid may be included in a DPA program and offered as a grant, a forgivable loan, or a low- or zero-interest loan.

Step 2: Do you qualify? 

Of course, before applying for assistance programs, it’s essential to ensure that you meet the basic criteria.

Some assistance programs are strictly limited to first-time homebuyers. This is defined as anyone who hasn’t been a homeowner for at least three years in most cases. So, if you previously owned a home over three years ago, you may still qualify.

Many programs are intended to help buyers who fall below certain income thresholds. Others assist individuals who are members of particular groups, like public service workers or members of the military and their surviving spouses. 

There are also programs designed to assist buyers who want to rehab a home or live in rural areas.

When searching for assistance, explore every qualifying option you can imagine seeing if there’s a program that matches your situation.

Step 3: Search high and low.

It’s also essential to know that programs are offered by every level of government and various community and charitable organizations.

National programs

Several mortgage programs already noted, like those offered by Fannie Mae, Freddie Mac, and the Veterans Administration, are available in every state. To apply, you need to select a lender who processes these loans.

In your state

Each state has a housing finance agency (HFA), although they go by different names. To identify your state’s HFA and their primary website, check out the National Council of State Housing Agencies’ (NCSHA) list of state housing finance agencies.

You may also be able to identify other statewide programs by searching online for “homebuyer assistance programs in (state).”

Closer to home

Likewise, searching for “homebuyer assistance programs in (city)” can reveal additional programs designed to make housing more affordable, including partnerships between local governments and nonprofit groups.

The more you explore, the better your chances of finding assistance. 

In addition to searching online, ask a local real estate agent who’s earned their Accredited Buyer’s Representative (ABR®) designation about options in your area. An ABR® has received specialized training in serving buyer-clients and prioritizes helping buyers achieve their homeownership dreams!