Did you know that there are many programs out there to assist both first time and repeat home buyers with their down payment? These programs were created since often times home buyers who would have no problem making their monthly mortgage payment simply lack the funds for a down payment and thus are unable to purchase a home. Down payment gift or grant funds typically never have to be paid back, and can help you get into a home even if you lack funds for a down payment.
Downpayment gift or grant programs typically contribute anywhere between 1% - 7% of the cost of the home to assist buyers. The logistics of how these companies work is a bit confusing, but basically what it boils down to is that the seller of the home must participate with the program. The seller contributes an amount of money to the grant program equal to the amount of the gift the buyer will receive, plus a small processing fee. Then, at closing, the down payment assistance program wires that money to the closing agent to be used toward the down payment or closing costs.
You may be asking yourself why a seller would choose to participate in one of these programs since there doesn't appear to be any financial benefit to it. The simple answer is that by having down payment assistance available on their home they suddenly can reach a much larger pool of potential buyers. This means that they typically can get their full asking price instead of having to negotiate a lower price with a prospective buyer.
Below are some links to down payment gift programs. Be sure to read the details of each program carefully and see if there is one that might work for you.
http://www.ameridream.org/
This non-profit organization provides home buyers with up to 10% of the purchase price of the home to assist with the down payment and/or closing costs. You do not have to be a first time home buyer to use this program.
http://www.ezdownpayment.com/gift/services/buyers.asp
Provides funds of up to 7% of the contract price of the home depending on the needs of the buyer. This program is open to both first time and repeat home buyers.
http://www.buyers-assistance.com/
non profit organization assists low to moderate income home buyers with money at closing for no down payment mortgages and money for closing costs that does not have to be repaid.
http://www.getdownpayment.com/buyers/
Gift funds of up to 6% of the contract price of the home toward the down payment and/or closing costs. Program is open to both first time and repeat homebuyers.