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Down Payment Assistance Programs – What Housing-Industry Pros Should Know

Down Payment Assistance Programs

One of the biggest hurdles to your clients purchasing a home is often saving for a down payment but it doesn’t necessarily need to be. There are down payment assistance (DPA) programs in cities, counties, states and even nationally that empower buyers of all types to purchase a home. There may be private programs available too. The main problem is, people often don’t know about them or they sound too good to be true. They’re not!

A savvy Real Estate Agent or lending professional who is aware of these programs and can share them with their clients in order to make “distant-future buyers” into tomorrow’s buyers by just sharing a little knowledge. Taking time to learn about and track the programs may be half the battle.

Making Time to Keep Up

DPA programs often have limited budgets, like most government or nonprofit entities, so you may have a narrow window for each one. If you’ve recommended a few that were already closed to new applicants, it can be discouraging and result in a reluctance to get your clients’ hope up. But if you implement a system for tracking them, however, you might end up being successful more often than not. 

This does take a little time and effort, but if you make a date with yourself or an office assistant to commit to a few hours a month, you can create a database of the programs in order to cross match any new, former or existing clients who might fit the criteria.

One idea is to create an email sub account and subscribe to updates from every program you encounter. Keep those email updates where they can be put into the database quickly and easily. Each time you sit down with a new client, do a search for open programs. In your first client consultation, find out what they do for a living and any relevant demographic information you can glean from them in order to find potentially thousands of dollars they may put toward a down payment.

Types of Programs

Government and private agencies hoping to assist underrepresented groups with home purchases can have a broad range of criteria for their programs. Some examples are:

  • Community heroes. These are often targeted to law enforcement personnel, first responders, EMTs, medical professionals, educators and veterans.
  • Recent college grads. These programs are often popular in states that have a large college population that leaves once they receive their education. DPA is great enticement to get educated grads to stay and put down roots in the region.
  • Minority programs. Regions that have a large immigrant population may want to encourage others who come from the same area to settle in a community where they feel “at home.”
  • Historic areas. Historic districts often have a lot of charm but might need a lot of TLC because of the age of the area. Also, local historic preservation foundations might have very strict rules for how landmark homes are to be rehabilitated. But if a buyer is committed, there are often grants and improvement loans available to those who want to commit to restoring a once stately home to its former glory. And these regions are often a magnet for corporate rehab as well, attracting chic small businesses and hip restaurants.
  • The Chenoa Fund. Check to see if this program is available in your area. It can save purchase-ready buyers months or years of saving as it allows them to buy with 100% financing.
  • Leverage your lending partners. Lenders such as New American Funding have DPA programs logged in their underwriting records and can quickly do a state-by-state search of programs it services.

With a little research, planning and upkeep, you can create a quick-search option that might make you a superstar in your clients’ eyes, which could not only result in an immediate home sale for you but can cement a loyal client relationship where they happily recommend you to friends and family for the foreseeable future.  

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