If lack of downpayment or funds for closing costs are the main hurdle to buying a home, a state or local downpayment assistance program may be the answer! Most states, counties, and cities offer assistance in the form of grants or no-interest loans to help home shoppers pay for these costs.
How Downpayment Assistance Programs Work
Assistance is usually funded by state housing finance agencies, cities, counties, or nonprofits, although some employers also have programs.
The types of payment assistance vary by program, but they are most often geared toward first-time homebuyers and can be a:
- Grant. This is an outright gift of money.
- Zero-interest, forgivable loans. The loan is forgiven after a specified time, such as three years,