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ATLANTA, Ga., Feb. 19, 2016 â€“ Atlanta-based Down Payment Resource, a data bank for home-buyer programs, released its fourth quarter 2015 Homeownership Program Index (HPI). According to the company, The U.S. has 2,406 home-ownership programs available to help prospective home buyers, and 84 percent currently have funds available â€“ a one percent drop quarter-to-quarter.
The numbers are even stronger in Florida, however. The state has 231 buyer-aid programs administered by 113 agencies. And while 13 programs are not currently funded, 94.4% have money available to help prospective home buyers.
The HPI found that 63 percent of buyer-help programs include a first-time homebuyer requirement, which they define as a buyer who has not owned a home in the past three years.
In 15 percent of home-ownership programs, specific incentives are available for community heroes, such as special benefits for veterans, educators, protectors, firefighters, healthcare workers and disabled home buyers.
“Renter surveys reveal the lack of understanding among consumers about down payments and current requirements,” says Rob Chrane, CEO of Down Payment Resource. “It’s important for prospective buyers to research their home loan and down payment options.”
One Florida agency, the Florida Housing Finance Corporation, acts as a state clearinghouse for many programs funded by government resources. However, specific programs and rules can vary by state, county and city.
Types of programs
Down payment and closing cost programs make up 70 percent. One common example: A second mortgage with a very-low or no interest rate, in which the payment may be deferred or forgiven incrementally for each year the buyer remains in the home.
Mortgage Credit Certificates (MCC) make up 8 percent of programs. An MCC reduces the amount of federal income tax a homebuyer pays each year, and it’s good for the life of the loan. It’s a tax credit, not a deduction, so it directly reduces taxes owed, up to $2,000 annually.
First mortgage loans make up 9 percent of programs. These home loans may feature below-market interest rates, lower or no mortgage insurance, or 100 percent financing. Issued by housing finance agencies, these loans can be even more affordable than other first mortgage products, and buyers may be able to layer them with other grants or down payment programs.
Additional programs make up 13 percent of programs. These may include employer assisted housing (EAH) programs offered by employers in certain markets and Individual Development Accounts that provide a matching down payment savings program. Programs are often designed to meet the specific needs of a community.
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