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By Lew Sichelman<\/div><\/div>\n

The Fla. Housing Finance Corp. saw its volume jump in 2021; activity was so brisk that it stayed open 24\/7 and increased its housing assistance amounts.<\/span><\/span><\/span><\/p>\n<\/div>\n

SARASOTA, Fla. \u2013 Lawmakers in Washington have earmarked billions of dollars for down payment assistance for first-time homebuyers as part of the Build Back Better legislative package championed by\u00a0President Biden. But rookie buyers don\u2019t have to wait for\u00a0Congress\u00a0to act \u2013 if it ever does.<\/span><\/span><\/span><\/p>\n

Plenty of financial aid is available to help buyers who are short on cash for a down payment and closing costs. Indeed, while a good chunk of the economy shut down during the pandemic, the state entities that administer assistance programs have been chugging right along.<\/span><\/span><\/span><\/p>\n

\u201cAll state housing finance agencies stayed open, and still are,\u201d reports\u00a0Sean Moss\u00a0of Down Payment Resource, an\u00a0Atlanta\u00a0firm that tracks nearly 2,200 different programs that buyers can tap for help.<\/span><\/span><\/span><\/p>\n

These agencies not only remained open, but in some cases, they set records. \u201cBusiness is booming,\u201d says\u00a0Lisa DeBrock\u00a0of the\u00a0Washington State Housing Finance Commission. \u201cOur phones are ringing off the hook.\u201d<\/span><\/span><\/span><\/p>\n

The\u00a0Florida Housing Finance Corporation\u00a0saw its volume jump considerably last year; activity was so brisk that it stayed open 24\/7 and increased its assistance amounts. And the\u00a0Arizona Industrial Development Authority\u00a0has helped 750 buyers so far this year.<\/span><\/span><\/span><\/p>\n

\u201cI expect our volume to drop off slightly next year \u2013 but then, I expected it to drop off this year, and it didn\u2019t,\u201d says\u00a0Dirk Swift, AZIDA\u2019s executive director.<\/span><\/span><\/span><\/p>\n

According to the\u00a0National Association of Realtors\u2019\u00a0latest figures, about 17% of first-time buyers receive some sort of monetary help, mostly in the form of gifts or loans from parents, friends or other relatives. After all, saving for a down payment remains the highest hurdle for most buyers.<\/span><\/span><\/span><\/p>\n

Less than 3%, NAR found, typically receive support from other entities. Had other rookies sought out these sources, perhaps many more of them would have been able to finally step onto the ownership ladder.<\/span><\/span><\/span><\/p>\n

One problem is knowing what\u2019s available. A new pact between DPR and\u00a0Zillow\u00a0should go a long way toward correcting that issue. The deal allows the popular real estate website \u2013 2.7 billion unique visits in last year\u2019s third quarter alone \u2013 to post all possible assistance programs that may be available to buyers searching for properties on its platform.<\/span><\/span><\/span><\/p>\n

Another issue is knowing where to find help. And a third is that some lenders and real estate agents look down their noses at down payment assistance.<\/span><\/span><\/span><\/p>\n

Let\u2019s dissect each point:<\/span><\/span><\/span><\/p>\n

What\u2019s available:<\/span><\/strong> DPR says 84% of the 2,180 programs it tracks were actively funded and available from state and municipal governments, nonprofits and employers. Every state has more than one program, reports Moss, and several offer more than 100 options.\u00a0California\u00a0has the most options, with 350.<\/span><\/span><\/span><\/p>\n

Programs include grants and no- or low-interest second mortgages with payments that may be deferred or even forgiven. Some are aimed specifically at veterans, first responders, educators, people with disabilities or other special circumstances.<\/span><\/span><\/span><\/p>\n

Most programs are aimed at first-time buyers, but some are not. Most have some kind of income or sales price limitation. But in some high-cost markets, the income ceiling can exceed 180% of the area median income. Even with income ceilings, though, the benefits can range into tens of thousands of dollars. And they can be combined with each other and used with all types of mortgages, including those backed by Uncle Sam.<\/span><\/span><\/span><\/p>\n

Benefits like that are worth looking into, if only because owning a house is the quickest, safest way to build wealth. If you had purchased a house three years ago using one of her state\u2019s programs,\u00a0Washington\u2019s\u00a0DeBrock points out, you would have already amassed thousands of dollars in equity.<\/span><\/span><\/span><\/p>\n

Where to find help:<\/span><\/strong> One way to find what\u2019s available is to go to <\/span>downpaymentresource.com<\/a>, <\/span>themortgagereports.com<\/a> or <\/span>Zillow.com<\/a>. Or simply search online for the benefits offered in your state.<\/span><\/span><\/span><\/p>\n

You might even ask a lender or a real estate agent if they know about such programs in your state. DPR partners with a number of lenders, banks and multiple listing services. Some use the data as consumer-facing information on their websites, while others use it internally to inform their own people or members.<\/span><\/span><\/span><\/p>\n

Misconceptions and misinformation<\/span><\/strong>: Some lenders believe that down payments that don\u2019t come solely from the borrower\u2019s wallet are not safe. Others think such loans are too difficult to deal with. But people who run the state agencies beg to differ.<\/span><\/span><\/span><\/p>\n

Swift in\u00a0Arizona\u00a0says it\u2019s actually more difficult to deal with applicants whose funds come from family or friends than those whose money comes from state-run assistance programs. DeBrock agrees.<\/span><\/span><\/span><\/p>\n

\u201cThe strength of DPA programs is that lenders don\u2019t have to worry about the funds being there at closing,\u201d says DeBrock. \u201cThe buyer has to go to closing\u201d to access the funds.<\/span><\/span><\/span><\/p>\n

Adds\u00a0Charles White, who directs Florida\u2019s programs: Assistance is \u201cvery trustworthy. … Borrowers are completely underwritten\u201d to make sure they meet program requirements.<\/span><\/span><\/span><\/p>\n

Another issue is that some lenders don\u2019t prioritize affordable lending. But then, that\u2019s another story.<\/span><\/span><\/span><\/p>\n

Lew Sichelman\u00a0has been covering real estate for more than 50 years. He is a regular contributor to numerous shelter magazines and housing and housing-finance industry publications. Readers can contact him at\u00a0<\/span>lsichelman@aol.com<\/span><\/a>.<\/span><\/span><\/span><\/p>\n

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\nAuthor: marlam<\/p>\n","protected":false},"excerpt":{"rendered":"