Down Payment Assistance/Tax Credit Programs
Down payment assistance loans are loans that help homebuyers with their down payment and closing costs. These loans can come from a variety of sources, including government programs, nonprofit organizations, and private lenders. The purpose of these loans is to help individuals who might not have the necessary funds for a down payment and are struggling to become homeowners. The loan typically has specific requirements that the borrower must meet, such as a certain credit score and income level. Once approved, the down payment assistance loan usually is recorded as a second or third lien, with or without accruing interest, which the borrower then repays at a time specified in each program. Some programs offer forgivable grants that have to meet certain requirements to be discharged. The availability of these programs changes with funding commitments and laws.