Down Payment Aid Available Everywhere: Report
A new report from RealtyTrac revealed that every county in the U.S. – 3,143 – has at least one program that helps homeowners afford a down payment on a home.
The data showed 2,000 counties have 10 or more such programs.
Real estate data firm RealtyTrac developed the study with assistance and data from Down Payment Resource, a web-based data company that is a subsidiary of Workforce Resource, another web-based company headquartered in Atlanta, that helps connect workers with little-known financial resources.
Out of 78 million condominiums and single-family homes in the U.S., 87% or 68 million, would be eligible for down payment assistance if buyers sought it, according to RealtyTrac.
The average amount of down payment assistance available across all counties is $11,565, the report noted.
More than half (54%) of the assistance programs offered community second mortgages as the source of the funds. Housing finance agencies or nonprofit organizations offered the second mortgages at low interest, often deferring repayment or eliminating the mortgage if the purchaser lived in the home for a certain amount of time.
Often, such arrangements can reduce the amount of cash needed to close on a home from $20,000 to $200, according to RealtyTrac.
“Many homebuyers, especially millennials, haven’t fully investigated their home financing options because are pessimistic about qualifying for a mortgage,” Rob Chrane, president/CEO of Down Payment Resource, said.
The firm’s Homeownership Program Index highlights the wide range and availability of down payment programs available to today’s homebuyers, he added.
“In fact, 91% of the 2,290 programs in our registry have funds available to lend to eligible buyers. Plus, income limits vary depending on the market and programs extend beyond just first-time homebuyers,” Chrane said. “It’s important for buyers to research down payment programs as part of their loan shopping process.”
Historically, low homeownership rates across nearly every age demographic have led to a public policy push to lower the barrier to homeownership through down payments as low as 3%, according to Daren Blomquist, vice president at RealtyTrac.
“[But] the fact is that the barrier to homeownership is often much lower than even that 3% for borrowers who take advantage of one of the myriad down payment help programs available across the country.”