Many hopeful homeowners find themselves stuck outside the housing market’s door due to the lack of cash for down payments and closing costs.
But fear not. You’re not stranded on your own island when it comes to those hefty upfront expenses.
Across the nation, numerous down payment assistance programs cater to both first-time and repeat homebuyers.
The National Homebuyers Fund (NHF) stands out as one such initiative, having distributed millions of dollars since its establishment in 2002 to aid families in realizing their dream of homeownership.
And the cherry on top? NHF grants and loans typically do not require repayment, effectively providing qualifying individuals with free financial assistance.
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The National Homebuyers Fund, Inc. (NHF) is a nonprofit public benefit corporation founded in 2002.
It offers closing cost and/or down payment assistance to qualified borrowers nationwide — including first-time homebuyers and repeat buyers.
The NHF can offer assistance up to 5% of your mortgage loan amount. So if you got a $350,000 mortgage, for example, the NHF might give you up to $17,500 as a grant or forgivable loan to help with your upfront costs.
California residents can also take advantage of other NHF programs, including financing for energy efficiency home upgrades, getting a Mortgage Credit Certificate (MCC), and additional down payment assistance.
The NHF is based in Sacramento, Calif., but people in all 50 states can pursue down payment and closing cost assistance from the NHF. It comes in two forms:*
To qualify for a grant or loan from the National Homebuyers Fund, you have to meet a few basic requirements. Luckily, they aren’t too strict:*
There are some limitations with NFH assistance.
You have to remain in the home for at least three years. So if you plan on moving or refinancing soon after buying your home with the help of NFH funds, steer clear.
Also, currently, the assistance can be used for a home purchase but not a refinance. And only a select number of participating lenders offer NHF assistance. So you’ll have slimmer pickings when shopping around for the best interest rates.
If you don’t qualify for an NHF grant — or, you’re looking for additional assistance to supplement one — there are plenty of other first-time home buyer programs available.
This article lists popular down payment assistance programs in every state.
Or, you can visit downpaymentresource.com to locate aid resources in your area you may qualify for based on your credit and income.
other programs offer assistance between 3% and 5% of the purchase price to eligible borrowers,” says Randall Yates, CEO of The Lenders Network.
Some homebuyers have also found deals through Fannie Mae’s HomePath program which connects buyers with foreclosed homes.
“Another place to look for homebuyer assistance is on the HUD website,” suggests Yates.
Ryan Leahy with Mortgage Network also recommends contacting the housing authority for the municipality where you’re buying. These agencies can help you find closing cost and down payment assistance programs that may not be widely known.
“Look closely at requirements that may have to be met, such as completing a first–time home buyer class,” advises Leahy.
Lastly, whether you pursue NHF funds or otherwise, “make sure you work with a loan officer that has experience working with first-time home buyer grants and down payment assistance programs,” Leahy adds.
“Sometimes, these programs can make your mortgage loan a bit more challenging to coordinate and ensure all the funds are ready for closing,” he says.
Having a loan officer who’s already familiar with the process will make everything go more smoothly. However, there are often steps you need to take on your own — like completing a home buyer education course — so you should contact the NHF before getting started to make sure you understand all the steps required.
Down payment assistance programs through the NHF and local and state programs lower barriers for first-time homebuyers.
Getting your first home is a big deal. Even if rates are higher now, history shows that homeowners usually make money in the long run.
Combined with down payment and closing cost assistance, the entire home buying process could be much more affordable than you thought.