Down Payment Assistance First Time Home Buyers – HFAs
Housing Finance Agencies (HFAs) assist with down payment assistance first time home buyers funding needs. In addition, HFAs are state agencies that work under a board of directors chosen by each state. These agencies direct many affordable housing and community development programs.
Housing Finance Agencies within each state operate under three federally approved programs:
- HOME Investment Partnerships
State and local governments sell tax exempt mortgage revenue bonds. They use the funds to finance low cost mortgages for lower income home buyers. Or for the development of multi-family units at rents affordable to qualifying lower income families.
Consequently, housing bonds are capped each year by each state. The limit is fixed by the state population, with a state minimum established. As a result, revenue bonds are available to down payment assistance first time home buyers at the area median income.
The Housing Credit is legislation passed by the Reagan Administration and Congress in the Tax Reform Act of 1986. Consequently, the Housing Credit offers a reduction in a taxpayer’s tax liability as an incentive for promising to investment.
State agencies grant Housing Credits to developers, who sell the credits in return for funding the construction of affordable housing.
Home Investment Partnerships
The HOME Investment Partnerships program is a federal block grant program. As a result, the program supplies states and localities with a funding source to meet their diverse affordable housing needs.
In addition, states and local governments utilize HOME to pay for new programs and projects. Including, multi-family construction, rehabilitation projects, down payment assistance for single family housing, and rental assistance—all targeted to low-earner families.
What it all means to you
So, now that you are familiar with the basics, what does it all mean to you? It means you can realize your dream of home ownership by using the down payment assistance programs described above.
Most of all, you won’t always be earning what you take home today. So, first time first time homebuyers can participate in these programs to give them a head start in equity building.
Furthermore, over time your investment in a home located in a great neighborhood will increase in value. In addition, will allow you and your family to take advantage of the benefits of home-ownership.
Equity Growth And Other Financing Options
As you begin to build up equity, other financing options become available to you. This will allow you to borrow against the value in your home. These borrowings come in the form of home equity lines of credit (HELOC) and home equity loans.
With new additional funding capabilities, you can renovate or remodel an existing home. In addition, pay for college education, help buy a business, consolidate higher cost debt and many other financing options. All of these options will help you improve your financial well being.
Later I’ll go into more detail about some of the best available down payment assistance programs out there. In addition, explain in more detail how they work and how to qualify. So, for now you have and understand the basics. Now it’s just a matter of educating yourself with the right information. As a result, you can now locate down payment assistance first time home buyers program that’s right for you.
Don’t worry if you don’t qualify right now due to a low FICO score or little to no earnings history. I’ll provide insights into ways to establish your credit as well as additional strategies to help build your income history.
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