Interested in purchasing your first home but uneasy about the down payment? It’s understandable. Lots of folks have been there. The good news? Help — quite possibly — is on the way. Currently pending before the United States Congress is a down payment credit bill that if enacted into law provides as much as $25,000 to people who become first-time homeowners. Want to know more?
Here are a few key provisions in The Down Payment Toward Equity Act of 2021 that we think you should know about:
1) The down payment credit is a grant program for states. Its chief goal is providing down payment assistance to first-generation homebuyers.
2) For purposes of this bill, “first-generation homebuyers” are people whose parents never owned a home during their lifetime. Those whose parents lost a home to foreclosure or short sale also meet the criteria.
3) Generally-speaking, first-time homebuyers may receive up to $20,000 in assistance. However, those who qualify as “socially and economically disadvantaged” can pocket up to $25,000. In this case, the “socially and economically disadvantaged” are those who have been “subjected to racial or ethnic prejudice or cultural bias because of their identity as a member of a group.” Any person deemed “economically disadvantaged” meets the bill’s income requirements.
4) Speaking of income, potential buyers must have earnings that are at least 120 percent below the median income for the area where the future home is located or the area where they now live.
5) The money made available through this bill, if passed, isn’t just good for down payments. Recipients of this credit can also apply it to closing costs or regular monthly payments to reduce the interest rate on the new mortgage.
The Wrap-up
Click here for a full overview of The Down Payment Toward Equity Act of 2021. If you think you may qualify, contact us once the down payment credit becomes law. However, in the meantime, don’t hesitate to reach out to our wonderful team of mortgage advisers with any questions you have. Fairway of the Carolinas offers a wide variety of loan programs. There’s a good chance we may already have one perfectly-suited for your needs and financial goals. We look forward to serving you!
Copyright©2021 Fairway Independent Mortgage Corporation. NMLS#2289. 4750 S. Biltmore Lane, Madison, WI 53718, 1-866-912-4800. All rights reserved. This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates and programs are subject to change without notice. All products are subject to credit and property approval. Other restrictions and limitations may apply. Equal Housing Opportunity. *Eligibility subject to program stipulations, qualifying factors, applicable income and debt-to-income (DTI) restrictions, and property limits. Fairway is not affiliated with any government agencies. These materials are not from HUD or FHA and were not approved by HUD or a government agency.
