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When you buy a home, usually, you will have to make a down payment. It is a lump sum amount to a percentage of the final purchase price of your home. The down payment you need to come with – and some mortgage programs require no down payment at all – will vary, but coming up with the required down is often difficult for homebuyers. This is where down payment assistance programs come in.
But before you apply for down payment assistance to purchase homes in Texas, you need to have a clear idea about various down payment assistance programs, and which one will be the ideal fit for you. To help you, here, we have listed down a few down payment assistance programs.
- Down payment assistance loans
If you are in the dilemma of whether you can cover a down payment on your own or not, you can consider a down payment assistance loan. These loans are unique because, unlike other types of loans, you can use these loans that come in three major forms, including second mortgages, deferred payments, and forgiveness loans, for your down payment. With a second mortgage, you can make your payments at the same time that you pay off your current loan while with a deferred payment schedule; you can put off your payments when you pay down your primary loan. And forgiveness loans expire after a certain number of years living in your home.
- DPA grants
You can qualify for DPA grants to cover the cost of your down payment that is different from DPA loans. Whereas you should repay a loan at some point, unless it is a forgivable one, you don’t need to repay a grant. The program requirements for the grants can vary by year. You should be aware of the fact that the grants might come with conditions. If you don’t live in the house for enough years, you might have to pay some of the award money back when you sell. So, be aware of the rules of your grant before making a move.
- HUD homebuyer programs
When you are looking for a down payment assistance program, you can opt for the online home of the U.S. Department of Housing and Urban Development. Better known as HUD, they offer a long-list of state-run housing assistance programs. These programs can help you find loans and grant programs, which can cover the cost of your down payment. Available through states, the requirements can vary. Make sure to check the requirements and understand these, before signing up for a state-run program.
- Good neighbor next door
HUD also offers this program. Though technically, it is not a down payment assistance program, you can use it to buy a home for a deeply discounted price. And it will result in a lower down payment. But you need to meet certain requirements to participate in this program. First, you can only buy a HUD-owned home. Second, it is open only to select few professionals, including teachers, law enforcement offices, and firefighter or emergency medical technicians. Besides, keep this in mind that not every lender offers this loan. So, if you are planning to buy a home through this program, make sure to opt for a lender who offers loans and support for these homes.Don’t allow worries of coming up with down payment scare you from buying a home. Nowadays, you have down payment assistance programs to help you with this. So, choose the right option and clear your finance hurdle.