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Are You a First-Time Home Buyer?
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Are You a First-Time Home Buyer?

Check out down payment assistance programs

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If you’re considering buying your first home in 2022, you’re not alone. Of the roughly 6 million homes sold in the U.S. in 2020, about 40 percent were to first-time* home buyers. And with mortgage rates still at historic lows, many people will strive to make a home purchase in 2022. 

You’ll have homes to choose from in 2022. Realtor.com predicts more than 6.5 million homes will sell across the country. While the median prices are likely to climb, forecasts say slightly more homes will hit the market, giving buyers breathing room in the bidding competition for their dream home.

Using our helpful first-time home buyer checklist is a great way to help guide you through your journey as you start the home buying process. One of the first steps toward homeownership involves gathering the funds for a down payment. Why is the amount of the down payment important when you want to buy a home?

  • Putting more funds toward the purchase will positively affect the amount you can borrow and the cost of financing.
  • Your down payment can also improve the value of your offer to a home seller.

Down Payment Assistance (DPA) Programs Can Support your Home Ownership Dream

Fortunately, down payment assistance (DPA) programs are available to help first-time buyers make a home purchase. Consumers National Bank has compiled a list of DPA programs for you to consider.

  1. Grants or gifts. Money from friends or family is eligible for a down payment on a home. The Ohio Housing and Finance Authority (OHFA) also offers financial support. The Your Choice DPA  from the OHFA is available to qualified applicants across the state. A primary advantage of gifts and grants is that you don't have to repay the money.
  2. A ‘soft’ second or forgivable mortgage. In Ohio, some mortgage lenders will provide a second mortgage to cover down payment expenses. You don't have to repay the loan until you sell (or refinance) your home. Many soft second mortgages are forgivable (meaning you don't repay them) if you stay in the house for a specified period.
  3. Low-interest loans that act as a second mortgage. You repay the principal amount you borrowed for the down payment plus interest. You'll pay the down payment loan in addition to your monthly mortgage.
  4. The U.S. Department of Agriculture’s (USDA) Farm Service Agency (FSA) has a DPA for beginning farmers. The program provides a long-term, low-interest loan for purchasing a farm.

Securing Down Payment Assistance for Your New Home Purchase

Consumers National Bank recommends talking with your lender about the types of DPA programs available in your area. As part of the process, you’ll need to complete an application that determines your eligibility for the DPA using details such as:

  • Household income
  • Credit history
  • Credit score

Some DPA programs award an amount tied to your home's purchase price, while others have a limit on the funds they'll provide for down payment or closing costs. 

Contact the mortgage lending experts at Consumers National Bank to get answers to your crucial questions about DPA:

  • Which programs align with your needs?
  • How much financial aid will the program provide?
  • Are you required to pay back the funds, and if so, what are the terms, or is the amount fully forgiven?

Let us connect you with the resources you need to get to the closing table!

Citations:
* https://blog.enactmi.com/first-time-homebuyer-market-report/ 

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