How to Raise a Down Payment – Chicago Tribune

 Trying to gather money for a down payment? Curious if you qualify for one of these programs? Feel free to email me or call at 1-800-942-18280*6029.

  1. VA, USDA: Verterans and active duty personnel, as well as some members of the National Guard and military reserves, can qualify for zero-down-payment mortgages through the US Departement of Veterans Affairs.  Such home loans are made by private lenders buyt backed by the agency.  Although participants in this program must pay a so-called funding fee, its costs can be rolled into the loan.  Closing costs, meanwhile, can be paid by the seller.  To qualify for the program, borrowers must meet the agency’s income and credit standards.  For more information, contact a VA-approved lender, one of the agency’s regional loan centers or a Realtor.
  2. State Programs: Consumers can also get down-payment assistance through their state housing finance agency.  Although offerings vary by state, such agenceies can help first-time buyers by providing grants, subsidized home loans and other programs, said Dewey, who also serves as the preseidnt of the National Council of State Housing Agencies.  The Virginia Housing Development Authority, for example, can provide eligible first-time buyers with federally insured home loans, including second mortgages to cover the down payment and closing costs.   Such buyers must meet requirements on credit, income and home sales price.
  3. FHA: Borrowers who aren’t eligible for zero-down-payment mortgage programs can still obtain low-down-payment home loans through the Federal Housing Administration.  The FHA is a federal agency that insures private lenders against default.  Qualified borrower can access FHA-backed mortgages for as little as 3.5 percent down.  These liberal requirements have helped turn the once-sleepy agency int an essential component in the effort to revive the housing market.  Although FHA-insured loans represented just 3 percent of the home-purchase mortgage market in 2006, the agency backs about 30 percent of home-purchase loans today.  FHA-backed loans are subject to credit and mortgage-size requirements. 
  4. Gifting Cash: Gifts from parents or other family members have long been a source of down-payment cash for young couples or first-time buyers.  “Those gifts have to actually be documented as gifts,” Gumbinger said.  “You must get something (in writing) from each of those donors that says there is no obligation to pay back the money.”  Be aware, however; that cash gifts from a single source that exceed $13,000 per individual, or $26,000 per couple, are subject to federal taxes.
  5. Savings Plan: Although it might take a little time and discipline, an old-fashioned savings plan can be a grestat way for consumers to put together enough cash for a down payment. 
  6. Selling Assets: Some of your down-payment cash could be sitting right in front of you, Gumbinger said.  “You may consider looking through all of the stuff you have accumulated and see if there are things that you might be able to sell that you dno’t need,” he said.  “if you have got three flat-screen TVs in  your apartment because they were cheap and you just started accumulating them, see if you can’t get rid of some of those assets, and see if they can be turned into something that’s going to be more productive for you.” 

Gathered from Chicago Tribune, Friday, October 15, 2010


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