Q: I know people are saying it’s a great time to buy a home right now. But with the credit crunch, are there any down payment assistance programs left out there? Do I now need to come up with 20 percent down to buy something?” — Craig J., Las Vegas
A: I help people buy and sell homes for a living, and I can tell you lenders have certainly tightened their standards.
While you don’t always have to have a down payment equal to 20 percent of the value of your home, it certainly helps today to have a substantial down payment, a strong credit score and a verifiable and stable income to help convince a lender that you can afford the mortgage loan you’re seeking.
During the housing boom a few years ago, it seemed like anyone with a pulse could get an adjustable rate or another more creative type of loan with little or even no money for a down payment.
Those days are over. But the good news is that there are still options out there for qualified people who are serious about buying a home and just need help coming up with a down payment.
I also like to remind prospective buyers that they still can get a Federal Housing Administration loan with as little as 3.5 percent down.
A great place to start is Consumer Credit Counseling Services. This is not the only source of down payment assistance in town, but it’s one we support at the Greater Las Vegas Association of Realtors.
Consumer Credit Counseling Service is a nonprofit United Way agency that offers free financial and consumer credit counseling and education.
Among its many other services, CCCS President and CEO Michele Johnson said her organization administers two programs designed to help first-time homeowners put a down payment on a home.
The first program is one CCCS administers for the city of Las Vegas, which makes federal grant money available to first-time homeowners who live in the city limits and meet certain income requirements.
Through this program, qualified buyers can receive up to $10,000, or up to 6 percent of the total loan amount, in what the CCCS calls “a forgivable grant.” To qualify, a one-person household must have an annual income of less than $35,750. A four-person household can earn up to $51,100 and still be eligible, Johnson said.
CCCS also offers a second, long-term program designed to help people who are trying to save money to buy a home in the near future, but who are not ready to buy right now. This one is made possible by federal grants distributed to member banks by the Federal Home Loan Bank of San Francisco.
This is a savings program that continues for at least 10 months and offers homebuyers up to $4 for every dollar they save toward a down payment on a home. Homebuyers can save up to $5,000 through this program and receive a grant of up to $20,000, which gives them a total down payment of up to $25,000. To qualify, would-be homebuyers must meet the same sort of income criteria as the city program. However, they can live anywhere in Clark County.
For more information, call 364-0344 or visit cccsnevada.org.
Patty Kelley is the president of the Greater Las Vegas Association of Realtors and has worked in the real estate industry for more than 30 years. To ask a question, e-mail firstname.lastname@example.org. For more information, visit lasvegasrealtor.com.