What to Know About Home Buying Assistance Programs

With varied benefits, including loans, grants, subsidies, lower mortgage rates or more flexible requirements for approval, home buying assistance programs are valuable resources designed to make purchasing a home more accessible.

These options can help potential homebuyers who otherwise may not meet the qualifications for financing approval or those without sufficient funds to fully cover the purchase or common closing costs. Opportunities like lower down payments (sometimes even no money down) and loan approval for those with lower credit scores can put homebuying within reach for first-time homebuyers, lower-income families, young adults and a wide range of other individuals with varying circumstances.

Home buying assistance programs are diverse in both the program provider — which includes government departments, individual lenders, and nonprofits — and offerings. Programs may be designed to:

• provide financial assistance;
• reduce or even eliminate the minimum down payment required;
• or secure more favorable terms, such as lower rates or reduced private mortgage insurance (which is usually required if a certain down payment threshold is not met).

Financial assistance programs have a variety of different repayment terms, so it is important to be aware of the requirements for each program.

Can I combine multiple assistance programs together?

It may be possible to benefit from multiple assistance programs, especially when using programs with different benefits, such as combining one offering a loan and another offering a grant for down payment.

Additionally, providers often combine multiple benefits into a single program, like First National Bank’s (FNB) Homeownership Plus Program or Homeownership Plus + Community Uplift Program (currently available in select markets). Each scenario is unique, but your program(s) provider can supply more details concerning restrictions and qualifications.

Do I need to be a first-time homebuyer to qualify for assistance?

Home buying programs serve a large range of individuals and situations. Some programs only offer first-time homebuyer assistance, while others provide support to individuals based on income level, current or future address, veteran status, profession or other personal circumstances.

Keep in mind that first-time homebuyer programs do not always exclude previous homeowners and may be available to those who have not purchased a home within the last three (or other number of) years. Other exceptions can apply as well, such as for divorced single parents, so be sure to research the qualifications for the program you are interested in — or request help from a professional to guide you to programs that fit your needs and qualifications.

How do I apply for a home buying assistance program?

The process for submitting your application will vary, depending on the provider of that program and their requirements. Often, government programs’ applications can be processed through a local lender or broker, though some — like the USDA’s Direct Home Loans — can only be applied for through their offices . Your program provider can help navigate you to the right resources for your application.

Will assistance programs affect my mortgage approval?

Many programs are designed to help increase your chances of mortgage approval by lowering requirements such as minimum credit score or debt-to-income ratios (how much debt an individual has compared to their salary and other income). These programs may also help boost the financing for which you are approved. However, the increased paperwork may result in a lengthier application process, so they may not be appropriate if your mortgage approval is time sensitive.

Are home buying assistance programs available in my state?

With thousands of options available throughout the U.S., home buying assistance programs are offered in all 50 states. Programs are extended through an entity within the state’s government and often financed and administered through financial institutions. Many county and city governments offer home buying assistance programming, as well. Additional programs through individual lenders and nonprofits, both national and local, are also available in most states.

Buying a home is an exciting experience — and a personal one. Discussing your individual circumstances with a professional, such as a local FNB expert, can help you find the programs and resources that best fit you and your future home.