Coming up with a downpayment on your first home can seem a little daunting. However, resources are available to help you reach your goal of homeownership. We’ve talked about FHA loans and downpayment assistance in the past, but as the mortgage world is constantly changing, let’s look at some options available to first-time homebuyers in Salt Lake City.
What is Down Payment Assistance?
Down payment assistance (DPA) is a program that provides financial aid to first-time homebuyers to help them with the upfront costs of purchasing a home. The goal of DPA is to make homeownership more accessible and affordable to those who might not otherwise have 20% to put down. This can include closing costs, your down payment, and other related expenses.
Who Qualifies for Down Payment Assistance in Salt Lake City?
Each DPA program has its own eligibility criteria, but most are aimed at helping first-time homebuyers, low to moderate-income households, and veterans. To qualify for DPA in Salt Lake City, you may need to meet the following requirements:
- Be a first-time homebuyer
- Have a household income that falls within certain limits
- Meet specific credit criteria
- Be purchasing a home within specific geographic areas
- Complete a homebuyer education course
What are the Down Payment Assistance Options in Salt Lake City?
There are a few including The Community Development Corporation of Utah (CDCU), Neighbor Works Salt Lake and Utah Housing which offers several DPA programs to help first-time homebuyers overcome the down payment hurdle. Here are a few of the available options:
HomeStart Homebuyer Tax Credit Program
This program is administered by the Utah Housing Corporation and provides a tax credit of up to 20% of the mortgage interest paid during the first year of homeownership. You can use the tax credit to offset the cost of the down payment and closing costs.
Some banks and credit unions have their own versions of this, so talk with your lender.
First Home Loan Program
The First Home Loan program is also administered by the Utah Housing Corporation and provides low-interest, fixed-rate mortgages to first-time homebuyers. The program offers down payment assistance as a second mortgage.
Salt Lake City Home Repair Loan Program
This program provides loans for eligible homeowners in Salt Lake City to make home repairs and improvements. The loans may also be used for down payment assistance in purchasing a new home.
To apply for down payment assistance, you’ll need to take the following steps:
- Determine your eligibility for the program
- Complete a homebuyer education course, if required
- Locate an approved lender or housing counseling agency
- Apply and provide any supporting documentation
- Wait for approval and follow the instructions provided
Down payment assistance is an excellent option for first-time buyers. With the help of these programs, you can overcome the financial barrier to homeownership and achieve your goal of owning a home. With a bit of research and effort, you can be on your way to homeownership in no time.
Salt Lake City And You
SLCHomes.com is a great resource to learn more about the city.
You can check out all our blog posts at the SLCHomes.com Blog. This is a great resource for learning more about the current state of the Salt Lake residential real estate market.
If you’d like to sign up to receive our monthly newsletter, the SLC Homes News, contact me, and I’ll put you on the list. Thanks!
