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Freddie Mac Is Still Promoting No-Down-Payment Mortgages

This just came out today from Freddie Mac: For many individuals, now is a great time to buy a home: mortgage rates are low and house prices are lower than they’ve been in years. But gathering enough funds for the down payment, fees, and closing costs is a challenge for some families. That isn’t necessarily a deal-breaker, however, because if you’ve done your homework, and are financially ready to be a homeowner, you may be eligible for down payment assistance. Help is available for many first-time homebuyers through grants and tax credits. The U.S. Department of Housing and Urban Development (HUD) has a directory of state, county, and local resources on its website that offer homebuying assistance to well-qualified, mortgage-ready borrowers. Each program has different requirements, and help may be limited to first-time homebuyers and/or low- and moderate-income homebuyers. Assistance can range from a few thousand dollars to larger amounts, depending on your needs, your qualifications, and where you choose to purchase your home. HUD provides grant assistance at the state and local levels through the HOME Investment Partnerships Program and the Community Development Block Grant Program. The American Dream Downpayment Initiative and the Neighborhood Stabilization Program are among the many homebuyer assistance programs HUD helps fund. Here are some key terms to remember when researching down payment assistance programs: Grants. Grants are funds that you do not have to pay back as long as you own and occupy your home for a certain period of time. Income limits may apply. Second mortgage loans. The most common down payment source, many second mortgage loans available through state or local governments and community-based organizations have low or no interest rates, and the payments are deferred over certain timeframes. Tax credits. Certain states and local governments, including housing finance agencies, issue mortgage credit certificates. These reduce the amount of federal income tax you pay, thus giving you more available income up-front to make your down payment or pay for closing costs.

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