4 Types of Down Payment Assistance Programs For First Time Home Buyers

Hello and welcome to Houston First Time Home Buyers Edition, formally First Home Houston (FHH), where we provide useful information to help Houston first time home buyers make the most informed decision when it comes to buying, decorating, and maintaining their first home.

Most first time home buyers believe that the monies available for down payment assistance is free money that does not have to be paid back. This will depend on the type of down payment assistance you receive.

While there are more than 2,000 programs available nationwide, there are only 4 different types of down payment assistance programs, and only grants can be considered free (with conditions). The other three must be paid back. They are as follow:

Forgivable loans. These down payment assistance are considered second mortgages, however, they are forgiven after you have lived in the house for the agreed upon period of time.  If you move, refinance or sell the house before that time, the amount must be repaid.

Loans with monthly payments are second mortgages that is included in your mortgage payment. This type of down payment is repay monthly along with your mortgage payment.

Deferred loans- are second mortgage that you will need to pay back when you sell, move, or refinance the house.

Grants – as mentioned above, are down payment assistant money you do not have to repay. However, you will need to live in the home for the agreed upon period of time for it to be forgiven.

So, if you are currently in the market looking to purchase your first home or getting ready to do so, but do not have the money for down payment, you will need to speak with your loan officer.

Each program will have its own set of guideline and requirements that must be met in order to qualify. As always, thank you so much for stopping by. Remember, if you are thinking of purchasing your first home, please contact us. We are here to help. We have been helping Houston first time home buyers since 2011 and we can help you. I hope you have an amazing day. Until next time...Diana