According to a recent Gallup survey, 68 percent of non-homeowners cite lack of affordability—particularly the inability to cover the down payment—as the top barrier to homeownership. That number has risen significantly from 45 percent in 2013, reflecting the growing pressure on renters aspiring to buy in today’s housing market. But many potential buyers may not realize that help is available. Across the country and right here in Metro Atlanta, down payment assistance programs offered by local governments, nonprofits, and financial institutions are making a real difference in helping individuals and families bridge the gap to homeownership.
Since 2010, Atlanta Neighborhood Development Partnership (ANDP) and its partners have sold nearly 830 homes to low- and moderate-income households in Metro Atlanta. A key factor in making these homes truly affordable has been the strategic use of down payment assistance. ANDP has leveraged federal, local, and institutional resources—including the Neighborhood Stabilization Program, HUD’s HOME Investment Partnerships Program, and most recently, its membership with the Federal Home Loan Bank of Atlanta—to provide more than $17 million in down payment assistance. These funds have helped aspiring homebuyers overcome the financial barriers to purchasing a home and, just as importantly, stay in those homes long-term.
But does down payment assistance really make a difference? The data says yes.
Depending on the program, down payment assistance can be used for more than just meeting the minimum down payment requirement—which is 3.5% for an FHA loan and up to 20% for a conventional mortgage. In many cases, the funds can also help cover closing costs, reduce the principal balance of the loan, and even “buy down” the mortgage interest rate—lowering monthly payments and making the loan more manageable over time. These added benefits significantly ease the financial burden for first-time and lower-income buyers…