Main Content

Sign Up Now

Welcome Home | a blog by the Pujals Team

The Pros and Cons of Down Payment Assistance Programs

Image of a house on a pile of moneySaving a down payment for a home is a big financial commitment. This is especially true if your goal is to save 20% of the purchase price. As such, many  homebuyers choose to investigate a down payment assistance program. These are typically grant and government funding options that assist homebuyers who meet certain criteria with their down payment.

Unfortunately, there is a lot of misinformation circulating about down payment assistance programs. One of the most common misconceptions is that only first-time homebuyers can qualify for down payment assistance. While it’s true that the majority of the programs have that as a stipulation (approximately 63%), that still leaves quite a few without that criteria. Additionally, most programs use the HUD definition of a first-time homebuyer. According to HUD, this is someone who has not owned a home for the past three years. So, if you owned a home at one time but have been renting for the past three or more years, you are technically considered a first-time homebuyer again.

In order to know if a down payment assistance program is something you should investigate, let’s look at some of the pros and cons.

Pros:

There are definitely some benefits to down payment assistance programs. The most obvious is that it can enable you to take out a smaller mortgage. Additionally, if you qualify for 20% or more in down payment funding, you’ll be able to avoid private mortgage insurance. And, qualifying for down payment assistance does not affect your ability to use other homeowner tax breaks, such as deducting your mortgage interest from your federal taxes.

Image of a jar of coinsCons:

As with anything in life, there are some cons. Most programs have many requirements for qualifying, so be prepared for a lot of paperwork. Additionally, there are often stipulations that you must live in the home for a certain amount of time, and you often are not allowed to rent the property. Finally, if you break any of the stipulations in your exact funding program, you could face steep penalties.

If you think a down payment assistance program could help you reach your home ownership goals, definitely investigate this option. But as always, be aware of all the pros and cons before moving forward.

Whether you’re applying for a mortgage or wanting to sell your home, you can find many great real estate tips on our Facebook page. If you’re thinking about buying or selling a home, we can help! Contact us today!

Share this page on:

View More

About / Testimonials / Contact

Welcome

Welcome! We are glad you’re here. We developed this website to give you the most up-to-date Napa Valley real estate listings and the most reliable information for home buyers and sellers.

Not sure where to start? Check out our blog, vlog, and articles for information on buying and selling a home, design and staging tips, and real estate investor information.

Ready to buy? Be sure to browse our current listings.We are eager to show you your next Napa Valley home.

Relocating to the area? Read up on all the great communities that make up Napa Valley.

Welcome! We are glad you’re here. We developed this website to give you the most up-to-date Napa Valley real estate listings and the most reliable information for home buyers and sellers.

Not sure where to start? Check out our blog, vlog, and articles for information on buying and selling a home, design and staging tips, and real estate investor information.

Ready to buy? Be sure to browse our current listings.We are eager to show you your next Napa Valley home.

Relocating to the area? Read up on all the great communities that make up Napa Valley.

Is it time to sell your home? Why not have the #1 real estate team represent you?

We’re sure you have questions. And we are here to help. Contact us for information on anything real estate related.

[READ MORE]
About Us

Leading the Pujals team are Jerry and Susan Pujals, who is ranked as the #1 Sales Team for California, Coldwell Banker Brokers of the Valley. Jerry, a Senior Broker, and Real Estate Advisor began his career in real estate with Coldwell Banker Brokers of the Valley in 1997. Susan, a seasoned Real Estate Sales Consultant joined the organization in 2008, which established the formation of The Pujals Team.

Having received national recognition for their performance and many local awards, Jerry and Susan are proud to be affiliated with Coldwell Banker Brokers of the Valley, Napa County’s real estate market leader for more than 20 years.[Read more]

Reviews
“Jerry and his associates are the best! Jerry cares for the individual taking in consideration what the person wants and cares for, making the best choices for you. I truly recommend them because they treat you as family and they make the process so easy for you. They are one of a kind!! We decided...” - Lucy Arreola Read More
“Jerry and Susan Pujals are adept at representing both sellers and buyers in this fast-paced Napa market. We’ve seen their work, both as sellers and buyers, and can affirm they shine in both arenas. The Pujals team just finished helping us through multiple real estate transactions: two homes prepared, listed and sold, and one home...” - Jane Callier Read More