How To Buy A House If You Can’t Afford A Down Payment

By Housing Nonprofit

Is your dream of buying a home put on hold because you don’t have enough cash?

If so, we’ll show you how that may not be an issue by tapping into Housing Grant programs that can give you the cash to become a homeowner.

There is so much needed to buy a home these days. For starters, you need a good credit score which may involve making large payments to pay off debt. Without a stellar credit score, you’ll have trouble getting a mortgage. What’s needed besides that solid credit score? A down payment. But unlike a car, a house purchase is much larger. And due to the high purchase price, you would need a significant sum of cash saved up to assure lenders that your are not a credit risk.

Before you let this news end your dream of becoming a homeowner, know this: You may not need a ton of savings to buy that first home because of Housing Grants are likely available in your area.

Four Types of Housing Grant Programs

If you were shocked that Housing Grants exists, it might help to consider them in these four categories. The favorite kind of housing grants are the forgivable kind, which is ideal for down payment assistance since you do not have to pay that money back. In essence, you could look at it as a partnership to live and work in the surrounding community and in return you can become a homeowner there.

If you cannot get a  forgivable grant, you could be eligible for a repayable grant that functions similar to a second mortgage. Unlike the forgivable, you will have to pay this one back along with your primary mortgage.

The third type of Housing Grant is a repayable grant but with deferred payments. That means nothing is due unless  you decide to sell the home, move, or refinance your mortgage. Only after one of these qualifying events would you have to repay this type of grant. If you never sell the home, often times the grant is forgiven after a number of years occupying the home i.e. 5 or 10 years.

Lastly, you can get a Housing Grant via a loan with flexible terms that acts like a second mortgage. These loans are commonly paid back alongside the mortgage but at least this would be at a lower interest rate than you would otherwise pay. We aim not to include any housing grant where the interest rate could be equal or higher than the the primary mortgage. You can check your eligibility for a Housing Grant by completing our Universal Housing Grants Application.

As for the sources of Housing Grants, the main program administrators include:

  • The federal government
  • City, county, and state governments
  • Charitable funds
  • For profit’s who invest in community building

How To Get a Housing Grant

Housing Grants are most often promoted to first-time homebuyers who fall into the middle or low-income categories using the home as a primary residence. You’ll need to combine the grant with an  approved mortgage lender and program to qualify. If it sounds like a lot of work, don’t worry, our Universal Housing Grants Application will take all your details into consideration and recommend the best fit Housing Grant for you.