Today’s “Ask the Expert” column features Dottie Sheppick, Affordable Housing and Strategic Relationships Executive with Bank of America.
Q: What are some of the best ways to help first-time homebuyers tackle the down-payment hurdle?
A: First-time homebuyers whose home purchases give move-up buyers the opportunity to sell and then purchase their next home are key to a vital, sustainable home-purchase market.
But many prospective first-timers are stymied by concerns about affordability and overcoming the down payment hurdle.
Most prospective first-time homebuyers look to personal savings or gifts from family members for down payment funds. But, very few realize that help can also come in the form of down payment assistance programs through employers, nonprofit organizations and federal, state or local housing financing agencies.
Down Payment and Other Cost-savings Programs Are Not Just for Lower-income Buyers
Many people associate assistance programs with lower-income homebuyers. This is a misconception. While there are income limits to most down payment programs, the upper limits are more generous than one might think. Here are a couple examples:
-A couple in Los Angeles County, Calif., using an FHA loan can earn up to $51,850 and be eligible for down payment assistance from the Montebello Housing Development Corporation.
-In New York City, a household of four people can have annual income up to $67,100 and be eligible for up to $15,000 toward down payment or closing costs from the New York City Department of Housing Preservation and Development.
According to findings from the second annual America at Home survey commissioned by NeighborWorks America, 70 percent of U.S. adults are unaware of down payment assistance programs available for middle-income homebuyers in their community.
Connecting Prospects with Information
Given the lack of knowledge about available down payment assistance, Bank of America launched its Down Payment Resource Center. It’s an online tool that gives prospective homebuyers access to a searchable database to help identify down payment and closing cost assistance programs in their local market. The tool was created in partnership with Workforce Resource to help educate prospective first-time homebuyers and valued business partners in the real estate industry.
By simply answering a few questions about their location and household, the Down Payment Resource Center shows down payment and closing cost assistance programs that may be available for eligible, qualified homebuyers. The database reflects information about more than 1,000 of these programs.
Customers can also connect with an experienced mortgage specialist to explore options and find out how to use down payment and closing cost programs in combination with first mortgage loans to make home buying more affordable.
With prospective first-time homebuyers whose affordability concerns have been keeping them sitting on the fence, this tool can be a resource for real estate professionals to help guide prospective buyers toward programs they may be eligible for and get the conversation started to help overcome the down payment hurdle.
For more information, visit www.bankofamerica.com.
