A recent survey prepared for NeighborWorks America indicated that 70% of American adults are not aware of down payment assistance programs that are available, according to a recent press release. NeighborWorks America is a national nonprofit community development corporation based in Washington, D.C. The corporation has local organizations around the country and provided more than $100 million in down payment assistance last year.
While there are programs available that do not require a down payment, like VA mortgage loans and USDA guaranteed or direct loans, there are programs that will provide grants that can be used by first-time home buyers in particular, to help complete a home purchase. In some areas these programs are provided through state or local governmental agencies. Down payment assistance can also be obtained by a gift from a relative or through any available employer sponsored program. Gifts from relatives must not be subject to repayment, whereas employer sponsored programs may be in the form of loans or grants.
HUD previously implement rules to limit the source of down payments on transactions involving FHA insured loans. HUD will not allow any third party that has a financial interest in the transaction to provide down payment assistance. For example, a seller cannot provide down payment assistance, but can provide seller concessions to help defray closing costs.
NeighborWorks America organizations around the country can be found at neighborworks.org Look for the "network directory on the right hand site of the web page. They do have offices in the major cities in CT. I have not explored their locations in all states, but the website is user friendly. It is certainly an option worth pursuing in an effort to secure affordable housing for a potential buyer who may not otherwise be aware, or who may not have sufficient available assets.
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