Down Payment Resource (DPR) [1], a provider of homebuyer assistance program data and solutions, reports that homebuyer assistance program administrators are responding to the mounting home affordability crisis by rapidly rolling out new homebuyer assistance programs and funding buydowns, as there are now 2,256 homebuyer assistance programs available to help people affordably finance homes, an increase of 54 programs over Q2’s totals.
“Most first-time homebuyers are well aware that interest rates are hitting generational highs and affordability is in the gutter—but what they are not hearing is that there are 2,256 homebuyer assistance programs available to help,” said Rob Chrane, Founder and CEO of Down Payment Resource [2]. “Program providers are working around the clock to ensure the programs they offer meet the needs of their markets. For this reason, many programs now allow funds to be used for buydowns and other popular financing strategies that take the edge off of monthly mortgage payments.”
DPR’s Q3 2023 Homeownership Program Index report [3] examines the 2,256 homebuyer assistance programs that were active as of October 25, 2023, and found the following:
- Two hundred and ninety-five programs will fund buydowns which allow borrowers to lower their interest rates by paying an upfront fee.
- Two hundred and fifty-three programs will fund permanent buydowns which allow borrowers to lower the interest rate over the life of the mortgage loan by paying an upfront fee. Approximately 11.21% of programs support these buydowns.
- Sixty-six programs will fund temporary buydowns that allow borrowers to lower their interest rates for a defined number of years at the beginning of the loan by paying an upfront fee.
- Two hundred and twenty-four programs will fund certain upfront loan fees, as 9.93% of the programs allow funds to be used to pay the upfront mortgage insurance premium (UFMIP) on FHA loans, the funding fee on VA loans, and the guarantee fees on USDA loans.
- Seventy-one programs will fund mortgage insurance (MI) buydowns which allow funds to be used to lower monthly MI premiums.
- Fifty new agencies began offering programs. More agencies have stepped up to administer homebuyer assistance programs as affordability worsens. Now, a total of 1,373 agencies provide assistance to aspiring homeowners, a 3.78% increase over the previous quarter.
Specifically for Native Americans, there are 43 homebuyer assistance programs available in 14 states that are designed to support Native Americans. While Native Americans are eligible for any of the 2,200-plus U.S. homebuyer assistance programs, these programs were specifically developed to help Native American homebuyers with down payments and/or other home-buying costs.
Published quarterly, DPR’s HPI surveys [3] the funding status, eligibility rules and benefits of U.S. homebuyer assistance programs administered by state and local housing finance agencies, municipalities, nonprofits and other housing organizations. DPR communicates with more than 1,300 program providers throughout the year to track and update the country’s wide range of homeownership programs, including down payment and closing cost programs, Mortgage Credit Certificates (MCCs) and affordable first mortgages, in the DOWN PAYMENT RESOURCE database.