Are you interested in purchasing your first home, but are concerned you may not have enough money saved up to afford a down payment? There are many city, county, and state government programs that offer financial help to eligible borrowers looking to buy a home. If you are located in the areas of Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee, and would like to learn more about down payment assistance programs to help you afford a home, contact Foundation Mortgage. Our loan specialists can work with you to determine your eligibility and help get you into your dream home.
The Basics of Down Payment Assistance Programs
Down payment assistance programs can come from state housing financing agencies, and also governmental county and city programs intended to assist in making housing affordable. These programs are usually designed for first-time homebuyers and offered in association with a type of mortgage, but you may also qualify if you are a previous homeowner who hasn’t owned a home in the past 3 years. Some programs are intended for people working in specific careers, such as city employees, police officers, teachers, etc.
There are a variety of down payment assistance programs, and they vary by location. Some typical down payment assistance programs include:
- Zero-interest loans that are forgivable – These loans can be forgiven after a specific period of time. If the borrower continues to own and live in the home after the loan period is over, the money does not need to be repaid.
- Zero-interest loans with deferred payment – With these types of loans, no payments are required for the down payment or closing costs until the home is sold, refinanced, or the mortgage is at the end of its term.
- Low-interest loans – these loans must be paid back after a specific amount of time, and make home ownership achievable by extending the cost of the down payment and closing costs over a span of several years.
- Grants – some programs offer money for down payments that is not required to be paid back.
Down Payment Assistance Requirements
Requirements for each type of down payment assistance programs do vary, but eligibility requirements typically include:
- You must meet specified income limits
- You must purchase a home in an approved location
- You must complete a guidance course for homebuyers
- The price of the home must be below a particular price, depending on the location
Applying For a Down Payment Assistance Program
If you are ready to purchase a home, and interested in learning more about assistance programs that can help you afford a down payment and make your dream of becoming a homeowner a reality, contact Foundation Mortgage. We serve clients in Knoxville, Maryville, Lenoir City, Oak Ridge, and Gatlinburg, Tennessee, and can help you better understand your home financing options.