After the downfall of the housing industry mortgage lenders had to alter their lending terms to ensure problems didn’t continue. One of the first things they changed was their down payment requirements and that was what most homebyers struggled with. Luckily, there are numerous down payment assistance programs out there for first time home buyers. For those of you that are new to the home buying world, you might be wondering, what are homebuyer down payment assistance programs?

These are programs that are available to help you come up with the required down payment amount. There are numerous options available in regards to these programs; you just need to know where to look for them.

What Are Homebuyer Down Payment Assistance Programs?

One of the great things about down payment assistance programs is they come in many forms, which means more people can actually use them. Down payment assistance programs offer grants, special mortgage programs, and second mortgages that are interest free. Each program has its own set of qualifications, but the problem is many of these funds go unused because people simply assume they don’t qualify. Down payment assistance programs are not just for low incomes, they are also for people who make a decent wage, but just not enough to allow them to save up for a down payment.

Income requirements do come into play with down payment assistance programs, but they are higher than you would expect. The exact income requirements will vary on location, but in general you can earn as much as 120 percent of the median area income and some places accept up to 140 percent. These qualifications are usually for programs that offer a grant to first time home buyers. How much you get in terms of a grant will vary based on how much money you earn. The good news about grants is they do not have to be paid back.

Another option first time home buyers have is a delayed repayment loan. Income requirements also come into play with these programs, but will be different from the requirements for grant programs. With a delayed repayment loan you can get anywhere from $5,000 up to $20,000 to help with your down payment. The money doesn’t have to be paid back until you sell your home.

Interest free loans are also available as a form of down payment assistance. These types of loans are done as a second mortgage, but not a traditional second mortgage. The loans are repaid when the original owner sells the house or once the mortgage is paid off. Money for these loans comes from housing authorities at the state and local level.

Many down payment assistance programs are designed to work with FHA loans, but there are some available for conventional mortgages. These programs are often provided through the lender, so in order to qualify for it you must qualify for a loan and obtain our loan through that lender.