Down Payment Assistance Program: Fill & Download for Free

I am.I’m concerned that the candidates are moving way too far to the left way too fast. And this is going to open up some vulnerabilities for them in the general election. I’m liberal. Think of your standard, big-government program, and I probably support it. But the country is not solely made up of people like me. Although Democrats seem to have decided to write them off, there are people in the center.11% of Trump voters came from Obama, as compared to only 4% of Clinton voters who came from Romney. This means that the overwhelming majority of switchers favored Trump.The calculus in the Democratic Party, is that we can turn out the liberal base enough to offset the loss of the movable middle. Can we do that? Maybe. But I tend to be a pessimist. And I’m even more pessimistic when I see proposals like this: Combatting the Racial Homeownership Gap | Kamala Harris For The PeopleThe idea is that there is a wealth gap between the various races, with Blacks lagging behind, and that a large part of this is due to or could be fixed by increased Black home ownership rates.I don’t have a problem with this proposal, honestly. But I have two questions:Will it make anyone vote for the Democratic Party who isn’t a committed Democrat?Is it not likely that at least some White voters who would otherwise have voted for the Democratic candidate will be turned off by what they perceive as racial favoritism? You don’t have to agree with their stance, but do you think these voters exist? And do you think their votes are worth getting?Let’s look at the meat of the actual proposal:We’ll invest $100 billion to provide down-payment and closing-cost assistance to four million homebuyers who rent or live in historically red-lined communities.Our plan will create a 100-billion-dollar U.S. Housing and Urban Development (HUD)-administered grant to provide up to $25,000 in down payment assistance and closing costs. According to research from the Urban Institute, in early 2018, first-time homebuyers bought houses worth $245,320 with an average down payment of $22,561, and an interest rate of 4.43%.This $100 billion investment will provide at least 4 million families/individuals living in federally-supported or renting housing in these historically red-lined communities with down payment and closing cost assistance.In order to qualify for the program:The grantee must be purchasing a principal residence.The grantee must have lived for at least the preceding 10 years in a historically red-lined community that remains low-to-moderate income.Grantee families cannot have an annual income of over $100,000 or $125,000 in high-cost areas.Grantee individuals cannot make over $50,000 or $75,000 in high-cost areas.The max grant is capped at either $25,000 or 20% of the loan value plus closing costs.The maximum home price to qualify for the grant is $300,000 for consideration of high-cost areas.Consistent with our more inclusive credit-calculation proposals below, an individual or family would need to demonstrate an ability to pay the mortgage with the lender.None of this should necessarily be objectionable to most working and middle class people, irrespective of their race. So, why phrase it in racial terms at all? Why not introduce it as a plan to help poor people acquire more wealth through home ownership? The result would be the same: Blacks constitute the poorest race in America, and would benefit more from any such proposal than anyone else. Why make an explicit racial appeal?It’s true that conservatives would still be opposed, no matter how you phrase it, but people who aren’t already committed conservatives could conceivably get behind this. As it is, why should poor White voters get behind this? Winning in politics is about building coalitions. And you do that by giving different members of the coalition something to get behind. Democrats have been hemorrhaging White working class votes. And part of the reason is because these voters don’t think that the Democratic Party cares about them. Wouldn’t this have been an opportunity to appeal to these voters?If it were just one issue, I might not be so worried. But I’m afraid their approach to campaigning is much too idealistic. Obama was a liberal, but he was always careful not to move too far away from the center. He was obviously not opposed to gay marriage, but there would have been little advantage in stating so in the 2008 campaign. So, he waited for a propitious moment before announcing his support. Perhaps I’m a bit too cynical, but I wish the current crop of candidates were a bit more cautious.

Yes, there are loans that allow for no money down, although some of those loans may still have closing costs that the buyer must pay.VA is for veterans and active military and allows for $0 down and very little closing costs. It is a great loan.USDA is a loan for rural properties and is similar to VA.FHA has a 3.5 percent down payment but it may be partnered with down payment assistance programs that are state specific.These loans have been around for decades and I do not think they caused the housing crash. It was lose guidelines on who was able to get the loans and other loan programs for people with little income or credit. All of these loans have strict guidelines for credit and income.How Down Payment Assistance Programs let you Buy With Little MoneyWhat Type of Loan allows Investing With Little Money DownHow to Buy an Investment Property with Little Money DownWill there Be Another Housing Market Crash? - Invest Four More

There are some good answers here, but I’ll add my own take.There has been a sort of fiction about buying a home: the “normal 20% down payment.” It’s pretty much nonsense, as down payments smaller than 20% are very common—even more the norm in certain areas where there is a concentration of first-time buyers.The fact is that there are many programs where buyer routinely pay less than 20% down:FHA (3.5% down)Conventional with private mortgage insurance (as little as 3% down)USDA rural loans (0 down)VA loans (0 down, no mortgage insurance)There are also assistance programs in all 50 states to help buyers with both down payment and closing costs. Here in my state of California, for example, there is the California Housing Finance Agency (CalHFA), which provides assistance, along with tax credits for eligible first-time buyers.It’s also important to realize that, for most of the loan programs that require mortgage insurance, it is possible to drop the insurance once the equity in the property is high enough.Mortgage insurance is not a punishment for being unable to gather a 20% down payment. It is a substitute for a larger down payment—and as such, it is a very useful financial tool.With all of that as preface, let’s look at the economic benefits of making a smaller down payment:If someone is trying to save money for a down payment, a smaller amount gets them into a home sooner. This can save a great deal of money. If the prevailing rate of appreciation is, say, 3%, that means that the home you can buy today for $300,000 will cost close to $310,000 a year from today. The cost of waiting in that case is $10,000. Mortgage insurance for a 90% loan will cost about $70.00 a month and will be removable in about 18 months.The cost of mortgage money is very low—especially with the deductibility of mortgage insurance. Making a smaller down payment frees up available cash for other uses—like paying off more expensive debt or investing at a higher rate than the net cost of the mortgage. This advantage is increased for those borrowers who are eligible for tax credits, such as Mortgage Credit Certificates, where an eligible first-time buyer is able to convert 20% of the mortgage interest paid into tax credits, which come off the bottom line of taxes owed. This is literally a 20% discount of the interest rate—a 4% rate becomes the exact equivalent of a 3.2% rate.A smaller down payment provides more benefit from leverage—the use of a small amount of one’s own cash (the down payment) plus a large amount of someone else’s money (the mortgage) to get a higher rate of return.The biggest reason, though, is the most obvious: with prices escalating nationwide, fewer people are able to get a large sum of money together for a down payment. While 20% of a $500,000 home may seem an insurmountable obstacle, $50,000 (10%) or even $25,000 (5%) may be more feasible and attainable.