What agents should know about the massive growth of down payment assistance

  • Down payment assistance is growing practically everywhere.
  • Most have some kind of income and/or sales price limitations -- but in certain markets, the income ceiling can exceed 180 percent of the median income for the area.
  • More than a third of the programs don't include a first-time buyer requirement.
  • Mortgage tax credit certificates (MCCs) only account for just 8 percent of the assistance programs, but they are among the fastest-growing form of aid.

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San Francisco, one of the highest housing-cost markets in the country, has had some form of down-payment assistance for homebuyers since 1998. But over the last four years, the city has steadily increased the amount of money it dedicates to helping its citizens buy houses. The San Francisco story Three years ago, Mayor Edwin Lee doubled the city's funding for down payment assistance, but it was hardly enough to satisfy the need for help. And in December, demand depleted the coffers six months before another round of funds is ready to go into effect this coming July. Now, the city is encouraging buyers searching for help “to be prepared” by attending homeownership counseling class, consulting with their real estate professionals and a participating lender, and building assets “sufficient enough for your required 5 percent down payment, closing costs and three months' reserves.” To say that the use of down payment assistance is booming would be an understatement. And ...