Down Payment Grant
A down payment grant is a form of financial assistance to help buyers get the funds required for paying a down payment on a home.
What is a down payment
Most mortgages require, or at least highly recommend, a minimum 20% downpayment on a home. Depending on where you live, this can be challenging to save for and put off buying a home for years. A down payment grant is one form of a down payment assistance program that helps give you the funds for your down payment. Furthermore, there is usually no repayment required.
How do down payment grants work?Most down payment assistance programs or DPA programs are operated by state housing finance agencies or local housing authorities. They provide a set amount of money to qualified borrowers. This money can be used for their down payment or closing costs.
In most cases, this money does not need to be paid back. However, there are usually conditions in place. If you do not abide by these provisions, you will be required to pay the money back.
For example, one common requirement is that the property must be used as your primary residence for 5 to 15 years, which varies on the amount of your grant. If you decide to move or sell the home before that time is up, you will be required to pay back the grant amount.