For a lot of people, the American Dream of owning a home feels vastly out of reach, due in large part to the typical 20 percent required down payment to buy a home. The good news is, there are some incredible down payment assistance programs available. Home Advantage and House Key Opportunity are a couple of the most popular programs currently available in Washington State.
How Much Assistance Can You Get?
If your total household income is under the required $145,000, and your credit score is 620 or higher, and you meet other basic requirements (such as proof of employment), you are likely eligible for the program. The amount of down payment assistance varies, but around $10,000 is the typical amount granted to the average home buyer in Washington State.
Do I Have to Pay it Back?
You do have to pay it back, but the interest rate is quite low, generally only zero percent to four percent, depending on the specific program. The loan is wrapped into your home mortgage, so you don’t have to worry about paying two bills. Also, most of the down payment loans are deferred, which means that no payment is due until you sell, move, refinance, or pay off the first loan.
Which Program is Right for You?
You have a lot of options, so how do you determine which one is best for you? The best way is to ask your mortgage lender. They’ll ask you some questions, such as where you live and your total household income. Then, they will suggest a down payment assistance program that is right for you. These are the main programs presently offered.
With the Home Advantage Program, you may borrow up to four percent of the mortgage loan amount, or if using an FHA conventional loan, it increases to five percent. There is also a needs-based option. If you are under certain income limits, you can borrow up to $10,000 for down payment assistance. The Opportunity DPA also provides up to $10,000 for qualified customers and veterans can get up to $10,000 for serving our country. If you or a family member living with you are disabled, you might be eligible for Home Choice, which provides up to $15,000.
Location Specific DPA Programs
If you live within Seattle city limits, you may receive up to $55,000, or up to $30,000 as an ARCH member in east King County. If you live within Tacoma city limits, you may qualify for up to $20,000, and in Bellingham up to $40,000. For those in Pierce County, the limit is $24,900.
All borrowers of these programs are required to attend a Housing Finance Commission-sponsored homebuyer education seminar before receiving funds. Giving cash back, or rebates, to the borrower is strictly prohibited.
To begin the process of receiving down payment assistance, visit a participating loan broker to determine the sales price that you can afford and just how much cash you will need to close. Your loan officer can then explain how much you may borrow on one of these programs. Before long, you’ll be handed the keys to your new home and see your American Dream come true.
Note: Opinions expressed are solely my own and do not express the views of my employer.