You may need between 3.5% and 20% of the home's purchase price as a down payment. That could be a significant amount. To help, many states and other organizations offer down payment assistance through bonds and grant opportunities. How can this help you? At ReviewMyMortgage.com, we can help you determine the best way to get the down payment assistance you need from local housing sites.

What Is Down Payment Assistance?

Bond and down payment assistance programs help people who want to buy a home obtain the down payment they need to do so. This can help otherwise qualified home buyers to obtain the down payment they need to purchase a new home.

Most often, down payment assistance bonds like this are a type of second mortgage. That is, they are an additional loan taken out on the home you buy. You will repay the loan over time, alongside your primary mortgage. These bonds are beneficial because they allow you to secure a low-interest and often easy-financing option for your down payment.

Don't confuse bonds and grants. Bonds are funds obtained as down payment assistance that you will repay over time. They operate like a second mortgage in some cases. Grants may not require repayment. They are also harder to obtain.

How Do Down Payment Assistance Bonds Work?

Local and state governments issue these bonds as a form of down payment assistance to those who meet the qualifications they set. Those qualifications differ between organizations. You will need to read through them to best understand what to expect.

Typically, these programs are a type of tool available to first time home buyers to provide them with cash to help close on the loan. That cash can be helpful to cover the down payment the lender requires, along with the closing costs associated with the loan.

With a bond down payment assistance program, the provider will place a lien on the property, much like a mortgage. However, some do not require repayment.

• Forgivable loans: One type of down payment assistance program is a forgivable loan which means that as long as the criteria are met, the homeowner does not have to repay the bond. For example, the lender may require the homeowner to live in the home for 3 to 5 years, and if they do, the funds borrowed are forgiven.
• Low-interest loans: This type of bond program allows for regular repayment until the loan is paid off. Often, these loans can be deferred until the home is sold.
• Grants: A down payment assistance grant is typically available when the assistance amount per household is low. This can help to reduce some administrative costs with these loan programs.
• Matching programs: Some programs are designed to match what the borrower has already saved for a down payment.

Who Qualifies for Down Payment Assistance Programs?

Qualifications for the individual program are dependent on many factors. These differ significantly from one organization to the next. Most often, these programs are available through local, county, and state programs. They may also be available through local housing sites. Each organization then sets the terms and conditions for the program.

Many have income restrictions. That means that the funds are only available to those who have an income under the limit set. These programs are meant to help provide those with lower income a way to purchase a home. However, not all of these bond and grant programs have income restrictions.

How to Find the Best Bond and Grant Down Payment Assistance Solution for Your Needs

There are a lot of programs available. However, it can be difficult to know which organization to turn to or where to find help. In addition, the amount available and repayment terms and forgiveness opportunities vary significantly.

Working with a PRO-Lender can help you. Our team at ReviewMyMortgage.com can offer guidance and support to you as you work to qualify for down payment assistance. That includes helping you to find programs you qualify for and can obtain to buy a home with now.

You'll want to compare several things to determine which program is best suited for your needs, including:

• Which providers are available to you in your local area as well as through local housing sites
• The household income threshold, if applicable, to qualify
• The type of program, such as a bond or grant, as well as who is issuing it
• The amount of funding available through the program
• The requirement to repay the loan (and if it is forgivable, which conditions may void that forgiveness

Having the team at ReviewMyMortgage.com help you can alleviate many of the questions you have. Reach out to learn more about how to get started.

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Let us help you find the best solutions for your needs. Search for bond programs near you now.

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