Creative
Ways to Afford a Home
If
your income and savings are making home buying a
challenge, consider these options.
1. Investigate local, state, and national down
payment assistance programs. These programs give
loans or grants to cover all or part of your
required down payment. National programs include
the Nehemiah program (http://www.getdownpayment.com)
and the American Dream Down payment Fund from the
U.S. Department of Housing and Urban Development
(http://www.hud.gov).
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 a
mortgage.
3. Consider a shared-appreciation, or shared
equity, arrangement. Under this arrangement, your
family, friends, or even a 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 all maintenance costs, but all
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 down payment
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 down payment. 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.
See
if you can qualify for a short-term second
mortgage to give you the money to make a higher
down payment. This may be possible if you have a
good income and little other debt.
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