Creative Ideas for First-Time Homebuyers Down Payment Assistance

By Nancy Page Cooper | June 6, 2024

I purchased my first home in the late 1970s. It took me several years while working two jobs to save $2,000 for the down payment. I proudly bought my 900 square feet home for $22,000 with an 18% mortgage interest rate. Yes, that’s correct, an 18% interest rate. And I almost didn’t qualify because I did not have a husband to co-sign for the loan. I was the first person in my family to own her own home. I am proud of this accomplishment to this day!

Fast forward to sky-high home prices and sky-high rental rates! Brand new small bungalows that cost between $600-700K with postage-sized lots and $500+ monthly HOA dues. And for FREE you get an interior view of your neighbor’s kitchen!

It’s not fair to be a first-time homebuyer. They compete for low inventory with other buyers who may enjoy a buying advantage. I get it! Perhaps we need to consider a first-time homebuyer attitude REFOCUS!

Attitude REFOCUS

The adage, “LOCATION—LOCATION—LOCATION” may transform into a new reality such as “Future Locations—Future Demographic Trends—Future American Dreams.” Re-look at the “cozy” two-bedroom, two-bathroom, small condo that you can afford NOW without becoming house poor. Or purchasing an income producing home where you live on one side and paying tenant lives on the other. Starter homes may lead to the “Great American Dream”.

A Plan for Purchasing Your Starter Home

Buying your first home requires an overall plan with a timeline, a focused direction with specific steps, and a method to fund the purchase.

You need a dedicated team of people to help you with this very confusing process. You also need funding $$$ sources: down payment, closing costs, and mortgage. And I highly suggest a strong shoulder to sound off when you’re overbid, outmaneuvered, or just tired!

Even with low inventory and continued 7% interest rates, there are creative first-time homebuyer down payment purchasing options if you do not have several hundred thousand dollars or equity from an existing home.

I am very happy to work with excellent team members who assist in the financing facet of home buying. I asked Matt Carrell from Cherry Creek Mortgage to suggest a few of his favorite mortgage assistance programs for first-time homebuyers.

CHFA (Colorado Housing Finance Authority)

Down Payment Assistance for First Time Homebuyers*

Applicant receives a 0% interest free 2nd loan to help with down a payment
Interest free 2nd loan amount is equal to 3% * first loan amount
No payments required on 2nd loan–ever
2nd loan must be paid in full if home is sold or refinanced
*Programs available for non-first-time homebuyers

The CHFA loan product is PERFECT for the homebuyer with limited resources for a down payment but with a robust household income. You are not required to be a first-time homebuyer! The typical users of the CHFA product are dual-income earners, but you don’t have to be in this category.

Guild Mortgage 3-2-1 Home Plus

Down Payment assistance + The Home Depot gift card for First-Time Homebuyers

Only 3% Down Payment Required
Qualified buyers can receive a $2,000 gift card from The Home Depot
Qualified buyers will receive up to $2,500 to use towards closing costs
Minimum credit score and maximum income determine eligibility

If you find yourself in need of a boost with a down payment and need funds to help with a little fixing up of your new home, the Guild Mortgage 3-2-1 Home Plus is a fantastic option. You must be a first-time homebuyer to use the program, and this one requires that your income is below 80% of the Area Median Income. Max annual income for this product is $104,000.

Guild Mortgage Payment Advantage Program

Finance your home purchase with conventional financing and we will buy your rate down by 1% for the first year

As little as 3% down payment
Minimum credit score of 620
First-time homebuyers and repeat homebuyers are eligible

Thanks again to Matt Carrell for providing such valuable information and options for first-time homebuyers. You can call him at 303-547-5991, email him at mcarrell@guildmortgage.net, or visit his website (https://branches.guildmortgage.com/co/denver/matt-carrell-657-chmcam.html?mattcarrell).

This program is exclusive to Guild Mortgage and Guild Mortgage clientele. If you have a down payment covered, this is a great way to help ease into that first month of your mortgage payments. Great for anyone who’s looking for a way to achieve a lower interest rate. After the first 12 months, your rate returns to the original level, but you can refinance at any time!

I’m happy to talk to you about additional strategies for raising funds. Do you need some quick ideas? Meet me for coffee or let’s Zoom together!