Down Payment Assistance Options

Often the biggest hurdles in buying a new home is saving enough money for a down payment. What if I told you that it is possible to buy a home for less cash than what most rental and property management companies require for a deposit? Well, it’s true!

Idaho housing has two options for down payment assistance. The first option is a small second mortgage. This mortgage is amortized over 10 years and the rates are right in line with the first mortgage. There is no prepayment penalty for this loan, so you can pay it off quickly. You can borrow nearly all the down payment, as long as you the borrower invest at least .5% of your own money towards the down payment.

The second option is a forgivable grant from Idaho Housing. You make no payments on this grant, but the amount of the grant is based completely on the interest rate of your first mortgage. The higher the interest rate, the higher the grant fund you get. The grant funds can be used to cover closing costs, the down payment or a combination of the two.  This grant is a lien against the property so like the first mortgage, should you sell your home or refinance within the first 7 years, a portion or all of this grant has to be paid back to Idaho Housing.

Here is the repayment schedule:

  • 25% is forgiven if paid off in year 5 (months 48-60)
  • 50% is forgiven if paid off in year 6 (months 61-72)
  • 75 % is forgiven if paid off in year 7 (months 73-84)
  • 100% is forgiven after year 7 (after month 84)

In theory, you could buy a home for less money down than you would be required to pay to rent a home and you could pay less per month as well!

 

 

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