Most people who plan to buy a house aren’t buying today. They’re getting ready to buy in three months, six months, a year.

So the real question is what you should be doing right now. My answer: work on your credit, and find out what down payment assistance you qualify for. Before you look at a single house.

Eric and I covered this on the Randal Jenkins Real Estate Hour, and it’s the topic I get the most pushback on. People hear “assistance” and decide it isn’t for them.

What down payment assistance is

Down payment assistance is money from state, county, city and other programs that helps buyers with the down payment, closing costs, or both. It comes in several forms:

• Grants you don’t pay back
• Loans you do pay back, sometimes with interest, like a second mortgage
• Loans with no payments or interest due while you own the home
• Loans that are forgiven if you stay in the house a certain number of years

There’s at least one program in every county, and some areas have dozens. Here in Florida that includes programs like Florida Hometown Heroes, which has been expanded to many people working for Florida employers, and county programs like SHIP in Pasco. Rules and funding change, so check what’s open when you’re ready.

Who it helps

More people than you’d think. Eligibility usually depends on things like household income, household size, the price of the home, where it is, and sometimes your job. Many programs are aimed at first-time buyers, and that definition is often broader than people assume.

Here’s what it can look like. A couple of years ago, a client of mine bought a $280,000 home with a $65,000 grant from Pinellas County. That’s the most I’ve ever seen, and most programs are smaller, but it shows what’s possible. What matters isn’t what you pay for the house. It’s how much you have to borrow.

The misconceptions

“I don’t need it. I have money.” Maybe. But assistance isn’t a safety net for people who can’t afford a house. It can lower what you bring to closing, help you buy a little more house, or, depending on the program, help buy down your interest rate. Ask yourself: can I buy without dipping into my emergency fund or my kids’ college money? That’s where these programs earn their keep.

“It’s free money, so it’s easy.” It isn’t. You fill out applications on a platform, sometimes more than once. Some programs require a homebuyer class. You might be asked for paperwork you don’t have handy. This is a hoop-jumping contest, and the people who jump get the house.

“I’ll find the house first, then figure out the money.” This is backwards. Programs have price limits and property rules. Find out what you qualify for first, then shop for homes that fit.

Why it’s worth the effort

Run the numbers. On a $300,000 house with an FHA loan, 3.5% down is about $10,500. Add closing costs, which I estimated on the show at around $8,000, and you’re near $20,000 before you get the keys. Assistance can cut that number way down, or free up money to lower your payment for the next 30 years.

How to find out what you qualify for

Start here:

• Watch my one-hour down payment assistance webinar. It walks through how these programs work and what to expect.
• Use my down payment assistance search and application portal. You enter your information and it shows which programs you may qualify for. It’s a Realtor-sponsored platform, and you can look up a specific house to see how many programs it may qualify for.

Then talk to me. I’m a loan officer with American Mortgage Services, NMLS #2053417, and I can walk you through the results, which programs fit, and how they work with your loan. If you don’t qualify yet, I’ll tell you what to work on so you’re ready in a year or two.

Don’t shop for a house first. Shop for the money first.

Call or text me at 727-409-4663. No pressure. Straight answers.

Watch the full episode: Randal Jenkins Real Estate Hour on YouTube

Randal Jenkins
Broker-Owner, Florida Real Estate Partners
Loan Officer, American Mortgage Services, NMLS #2053417
727-409-4663 (409-HOME)