Need down payment assistance found the perfect home

by Amanda Bogan
(lester, pa usa)

Visitor Question: I've been trying to get answers and keep getting the run around. I found a home for $99,000. It is a foreclosure. I was told I could get assistance with the down payment; then I'm told I can't, and then I'm told I can again. I have a newborn baby and I'm trying to get us a home. Can I get assistance with the down payment yes or no?

Editors' Reply:

We probably aren't very timely in answering Amanda's question, but we'll answer anyway because it applies to many people.

Whether you can obtain down payment assistance typically depends on some level of government. One exception might be that a few employers help employees with down payments, especially for a first home.

In the U.S. many programs are provided through state housing agencies. Almost every state has one, and you can find yours on the directory offered by the National Council of State Housing Agencies website.

At the local level many governments (such as a city, county, town, or village) may have short-term or relatively long-lived programs for down payment assistance. These could be directed toward a geographic area, first-time home buyers, lower-income home buyers, or some other civic goal.

For example, a number of pricey real estate markets have initiated programs so that firefighters, police, teachers, and other vital members of the local workforce can afford to live there. These might be a source of down payment assistance also.

You really have to trust your real estate agent, if you have one, and your lender to give you good information about these programs.

However, don't be afraid to ask for a detailed explanation of why you are being denied. Also it's your right to learn about other programs if one isn't going to help you.

If you are getting the run-around, try calling your state housing finance agency just for advice. Or if you live in a town or city, call your county or parish government.

Do some independent research too, by searching online for your particular county in Pennsylvania and a phrase such as housing assistance.

Another approach is that if you think you may be called low-income, be sure to talk about that factor when you ask questions in your community.

It sounds as though in your case your lender is flip-flopping on whether you qualify for some program. This might not be because of you or your finances, but instead it could be about the availability of funds. Almost all programs have a budget limit, and the running total could vary from day to day as deals fall through, or as home financing itself is denied.

We hope you know that even if your real estate agent, seller, friends, or parents are advising you to deal with one particular lender, you can choose any lender you want.

If you don't think this bank, savings and loan, or mortgage company or mortgage broker is dealing with you in a straightforward way, it might be worth it to start the application process all over again with a different lender.

If you have a checking or savings account at a bank other than where you are applying for your financing, ask an officer there what they know about down payment assistance. You don't have to say that you're already dealing with another mortgage provider.

Be aware too that the type of mortgage you are seeking governs how much down payment will be required.

Some day we hope you're able to look back and smile about how difficult it was to come up with a down payment for that first home. Staying with home ownership, if you can get started, really rewards many young moms.

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