4 types of down payment assistance for first time home buyers

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.

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 before applying for your loan.

Each program will have their own set of guideline and requirements that must be met in order to qualify. We at First Home Houston is always looking out for your best interest. As always, we thank you for stopping by. Until next time… Diana.