You’ve got a decent-paying job, a bright earnings future, and acceptable credit. It’s frustrating to have all that and still not be able to buy a Southern Maryland home because you don’t have the thousands of dollars in cash you need for a down payment and closing costs.
In fact, the dreaded down payment stops more potential homebuyers in their tracks faster than any other aspect of the loan process!
Read recent articles about down payment headaches, and you’d think it’s only Millennials who have trouble coming up with the money. In reality, most would-be first-time Southern Maryland homebuyers – regardless of age – find saving that much money challenging.
You may qualify for a loan with a lower down payment, but do you really want to add to your monthly house payment by buying the mandated private mortgage insurance (PMI) policy? That’s what will be required if you don’t have 20 percent equity in the home you purchase.
Let’s look at ways you can get help with the down payment on your new Southern Maryland home.
Need help getting enough for a down payment? Just ask for help! HomeFundme CMG Financial offers you a way to crowdfund your down payment – with the approval of Fannie Mae and Freddie Mac.
Before the crowdfunding concept came along, lenders stipulated that your down payment and closing cost funds must come from your savings (mutual funds, stocks, IRA, and 401(K) included); proceeds from the sale of another property; assistance from government programs or non-profits; union; employers; or gift money from an immediate relative.
HomeFundMe allows anyone to donate funds to help you buy a home, and CMG Financial provides the online platform.
If you’ve ever supported a project on Kickstarter, you know that many crowdfunding endeavors offer a return on investment. In contrast, the HomeFundMe program returns nothing to those who give. Money given is considered a gift, although they can make the gift conditional on the money eventually going to fund a home purchase.
The program does offer incentives to savers. Attend credit counselling and education classes, and you may receive a grant of up to $2,500. Then, the crowdfunding platform will match donations “$2 for every $1 raised, up to $2,500,” according to CNBC’s Diana Olick.
The government, from local to county, state, and federal, offers programs to help Americans get into home ownership. Some of these programs are geared toward low-income applicants while others are open to all.
Federal Home Loan Bank
The Federal Home Loan Bank offers three programs to help homebuyers with their down payments and closing costs:
- Home$tart® — Assistance up to $7,500 for borrowers who take the homebuyer education program and earn up to 80 percent of their area’s median income (find yours on HUD’s website). Unlike the aforementioned programs, these funds come in the form of a grant.
- Home$tart Plus — $15,000 to borrowers who are currently receiving public housing assistance. Borrowers must complete a financial literacy program and be income qualified.
- Native American Homeownership Initiative (NAHI) — $15,000 to eligible Native American households to help with a down payment and closing costs.
Good Neighbor Next Door
This program falls under the auspices of the United States Department of Housing and Urban Development (HUD) and offers a discount (typically 50 percent) off the asking price of a home. The program is open to applicants in the following professions:
- Pre-Kindergarten through 12th grade teachers
- Law enforcement officers
- Emergency medical technicians
Be aware that this program only covers homes in HUD’s revitalization areas that are listed for sale through this program.
Learn more about the program and how to apply on HUD’s website.
State and local programs
FHA offers state-wide down payment grants through a variety of programs. Search for them here.
Search for local programs at Freddie Mac’s website.
The National Association of Local Housing Finance Agencies (NALHFA) suggests using downpaymentresource.com to find information on local assistance programs.
Finally, several labor unions, such as the Culinary Union, offer homebuying assistance programs for members.
Waldorf MD Homes for Sale and Real Estate Services in Southern Maryland. You now have a search engine to help you with your Southern Maryland home search! And I’m ready to provide you with a custom home valuation if you’re considering selling your home. Let’s connect to discuss how I can help you. Contact Kimberly Bean at 301-440-1309
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