If your income and savings are making homebuying a
challenge, consider these options.
1. Investigate local, state, and national downpayment assistance programs.
These programs give loans or grants to cover all or part of your required
downpayment. National programs include the Nehemiah program,http://www.getdownpayment.com,
and the American Dream downpayment fund from the Department of Housing and
Urban Development. http://www.hud.gov/news/release.cfm?content=pr02-014.cfm
2. Get the seller to provide financing. In some cases, sellers may be
willing to finance all or part of the purchase price of the home and let you
repay them gradually, just as you do with a mortgage.
3. Consider a shared-appreciation, or shared equity, arrangement. Under this
arrangement, your family, friends, or even an
third-party may buy a portion of the home and thus share in any appreciation
when the home is sold. The owner/occupant usually pays the mortgage, property
taxes, and maintenance costs, but all the investors' names are usually on the
mortgage. There are companies that can help you find such an investor if your
family can’t participate.
4. Get help from your family. Perhaps a family member will loan you money for
the downpayment and/or act as a cosigner for the mortgage. Lenders often like
to have a cosigner if you have little credit history.
5. Lease with the option to buy. Renting the home for a year or more will give
you the chance to save more toward your downpayment. And in many cases, owners
will apply some of the rental amount toward the purchase price. You usually
have to pay a small, nonrefundable option fee to the owner.
6. See if you can qualify for a short-term second mortgage to give you the
money to make a higher downpayment. This may be possible if you have a good
income and little other debt.