If your income and savings are making home buying a challenge, here are some options to consider:
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. The Nehemiah Community Foundation has compiled one of the most comprehensive Down Payment Assistance Program databases in the country to help reduce your barriers to homeownership. There are also national programs including the American Dream Downpayment Initiative from the U.S. Department of Housing and Urban Development.
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.
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.
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.
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