As a part of its many products, we offer down payment assistance programs to aid more people attain the dream of homeownership. In general, you can use a down payment assistance program to cover a portion of the upfront cost of purchasing a home. Specifically, the down payment. These programs provide financial assistance in the form of grants, loans, or forgivable loans to make homeownership more accessible. Because these programs reduce the upfront costs, you’ll be able to lower your requested loan amount and potentially qualify for a better loan or a lower interest rates.
Accordingly, you should research local housing agencies and explore available programs to determine your eligibility. Pivot will help you!
Types of down payment assistance programs
There are several types of down payment assistance that may be available to you, depending on your location and financial situation. Here are a few key types.
Grants – Down payment assistance grants require no repayment. They’re typically government-funded, local- or state-run programs that subsidize part of the down payment for eligible buyers. They’re usually only available to first-time home buyers and require you to remain in your home for a set number of years before selling. If you do sell your home before the agreed-upon period of time, you’ll have to pay back the grant amount upon closing.
Forgivable loans – The structured loan, known as a second mortgage, does not need repayment unless you sell before reaching an agreed-upon number of years. These loans have 0% interest, meaning you’ll just make a principal payment each month.
Deferred-payment loans – This type of loan covers a portion of your down payment. You repay this loan when you sell or refinance your mortgage. It is also structured as a second mortgage with 0% interest.
Down payment loans – This is a second mortgage with a low or no-interest rate. You open it when you get your first mortgage, and it covers the cost of your down payment. You repay it monthly over time, similar to your first mortgage, but typically with a very low interest rate.
Pivot Lending Group proudly originates loans with access to the following programs:
- Colorado Housing and Finance Authority (CHFA)
- Colorado Housing Assistance Corporation (CHAC)
- eHousing Plus (Colorado and Arizona)
- Metro Mortgage Assistance (City and County of Denver)
- Mortgage Credit Certificates
- Aurora HOPE (City of Aurora, CO) (HOAP)
Lastly, qualification for these down payment assistance programs varies. There are limitations on the amount of income a household can have to be considered. We are excited to help you explore your options to see if any of them may be a fit for you.