Special Programs

Many homebuyers, especially first time homebuyers, often need a little assistance with the home buying process. Potential homebuyers often lack a down payment, or can’t afford a high house payment, or need help improving their credit so they can qualify for a better mortgage, so they often assume they can’t buy a home right now. But this may not be true, as there are many programs out there designed to help you.

Finding these programs offering assistance is often difficult because you don’t know where to start your search AND because many professionals in the industry either don’t know about these programs or simply refuse to offer the programs to buyers. But with a little persistence and self-research, you may be able to get the help you need and buy your home after all.

How to Find These Homebuyer Assistance Programs

A great place to begin your research is with that keyboard under your fingers right now. There are many cities, counties, and states that offer assistance programs for low to moderate income homebuyers, and you can find these programs with a few simple internet searches.

On your internet search, type in the search words “your city” and “down payment assistance”. For example, in the above example, you’d type in “Seattle down payment assistance”. Your search results will likely produce a number of mortgage lenders who are using those key words in their websites to try to get you to apply with them. Ignore these sites at first and keep going down the list.

Look For “.Org”

In the “Seattle” example, you may have to go to the second or third page of search results before you find what you’re looking for. And what are your looking for? A city, county, or state-sponsored organization offering the assistance program. A good clue for finding such an organization are web addresses ending in “.org”. (Yes, any website builder can use “.org” for their web address, so just because it ends in “.org” doesn’t mean it’s what you’re looking for, but most ALL community or state-sponsored organizations will use “.org” for their address.

On the website, you’ll find information of how the program works and who qualifies. You’ll see income limits, interest rates, homebuyer class requirements, and other such information clearly defined for you. (Mortgage lenders who are trying to trick you in to applying won’t have this kind of information on their website – they’ll just have general “we’re wonderful so you should let us see what we can do for you – apply here” verbiage on the sites.)

Community 2nds

Finding these organizations offering down payment assistance and below-market interest rates is a great place to start. But this isn’t the only place you can find assistance. Many loan programs allow “Community 2nds” to help with your down payment and closing costs. The above assistance programs I mentioned are a type of “Community 2nd”, but there are others out there too.

There are many assistance programs offered to special groups, such as veterans, teachers, police, fire fighters, paramedics, and people with disabilities (or a family member with a disability). In addition, employers and churches can, in some cases, offer “Community 2nds” as well.

HUD Foreclosure Auctions

The Federal Government has a division called “HUD” that offers assistance to certain groups and you can even find auction sites for some foreclosed homes in your area that you can pick up for a bargain.

In some cases, the seller of the home can even assist you. Rules change constantly, so you’ll have to work with a mortgage lender on what is allowed and what isn’t, but often a seller can help you with the closing costs, the down payment, and even carry part of the financing themselves.

Why Must You Research On Your Own?

In many cases, mortgage lenders either don’t know about special programs or they just don’t want to be bothered with them. For example, many of the “Community 2nd” programs require that the loan officer pay for and attend training classes before they can offer the program. More importantly, these programs often limit the amount of compensation that the loan officer can earn. So many loan officers aren’t interested in paying for training so they can qualify to sell loans that don’t pay as much commission.

In addition, many of these programs prohibit certain types of lenders from participating at all. For example, mortgage “brokers” are often excluded from being able to offer many of these programs. Doing research on your own will help you find out what your options are, and if your loan officer isn’t able to help you with a certain option – go find one who can.