How to Buy a Home with Government Assistance

One of the biggest hurdles to homeownership is the down payment that’s usually necessary to obtain a mortgage loan. But if you’re a first-time homebuyer looking to purchase that starter house, did you know there are a variety of programs that will provide you assistance with your mortgage and down payment?

At OVM Financial, our loan officers have access to a wide array of state-based programs that provide down payment assistance (DPA) to first-time and qualified homebuyers, often in the form of grants or forgivable loans you won’t have to pay back. Read on to learn more about how to buy a home with government assistance.

What kind of government assistance is available?

Most state housing authorities offer some kind of program or programs to assist borrowers with making that down payment on a first-time home. At OVM Financial, we routinely help homebuyers in Florida, North Carolina, and Virginia access down payment assistance so they can buy a house with no money down.

Here’s a quick sampling of what’s available:

Government down payment assistance in Florida

The Florida Housing Finance Corporation (FHFC) offers second mortgage programs to provide you with a loan to help with your down payment and closing costs. Options include the following:

• Florida Assist, which offers up to $7,500 in non-forgivable down payment and closing cost assistance and as much as $10,0000 for approved FHA, VA, or USDA borrowers
• HFA Preferred and HFA Advantage PLUS Second Mortgages, which provides down payment and closing cost assistance for up to 5% of your total loan amount
• The Florida Homeownership Loan Program, which offers up to $10,000 of down payment assistance for a 15-year, 3%, fully-amortizing second mortgage.

Buying a home with government assistance in North Carolina

The North Carolina Housing Finance Agency provides up to $8,000 in down payment assistance to qualified first-time homebuyers and veterans through the following programs:

• NC Home Advantage Mortgage, which covers up to 5% of your loan amount in down payment assistance
• NC 1st Home Advantage Down Payment, which is a 0%, deferred second mortgage, forgiven 20% per year at the end of years 11-15, with complete forgiveness at the end of year 15

Down payment assistance for buying a home in Virginia

The Virginia Housing Development Authority (VHDA) offers 30-year, fixed-rate mortgage loans to first-time and qualifying, repeat Virginia homebuyers along with an array of down payment assistance options, including the following:

• VHDA FHA Loan with a DPA Grant, which provides a low down payment option with additional free DPA up to 2.5% of your property’s purchase price
• Fannie Mae No MI Program with a VHDA Grant that provides mortgage loan access with a 3% down payment requirement that shrinks to 1% when coupled with a 2% DPA grant
• FHA Purchase with a VHDA Plus Second Mortgage, which essentially offers a no-down-payment option for qualified borrowers
• Fannie Mae No MI with a VHDA Plus Second Mortgage with its no-down-payment option up to 4.5% of the home’s purchase price for first-time buyers as well as repeat buyers purchasing in targeted areas.

Learn how to qualify for government assistance

To qualify for DPA, you’ll likely have to be first-time homebuyer (that means anyone who hasn’t owned and occupied a home in the last three years), though there are exceptions for active-duty military personnel and veterans. Other common requirements include the following:

• A minimum credit score of 640
• Completion of a homebuyer education course
• A property priced below the state housing authority’s individual county limit
• A total household income below the defined housing authority limit for your county

Ready to purchase that first home? Reach out to an OVM Financial expert, who can help you navigate how to buy a home with government assistance as well as provide you information on other state-based programs like down payment assistance in Texas.