Buying a home is one of the biggest investments an individual will make in their lifetime. For many potential homebuyers, one of the major barriers to homeownership is the down payment. It can be challenging to save up enough money for a down payment, especially in expensive housing markets. However, there are resources available to help make homeownership more attainable.
In this guide, we will explore the various down payment assistance programs available in Georgia and how they can benefit homebuyers in the state.
How is the real estate market in Georgia in 2023 for first-time homebuyers?
Based on the data from October 2023, the real estate market in Georgia, particularly in Atlanta, presents a mixed bag for first-time homebuyers.
The year-over-year increase in home prices, with the median sale price reaching $365,600, indicates a more expensive market, requiring first-time buyers to possibly extend their budget or reconsider their preferred locations and housing types. The significant 21.2% drop in housing supply suggests a highly competitive market with limited choices, necessitating quick decisions and flexibility in preferences for these buyers.
However, the 17.9% decline in the number of homes sold and the reduction in homes selling above list price could hint at a slightly less aggressive market, potentially offering more room for negotiation.
Low down payment programs available in Georgia
Mortgage lenders and brokers offer a wide variety of low down payment programs in Georgia . These programs offer new homebuyers a range of options to finance their home purchase, with down payment costs as low as 3%.
Some of the popular programs in Georgia include:
1% Down Payment Program
This program is available through mortgage brokers with a down payment of just 1%. This is a conventional loan in which the borrower puts 1% down and the lender adds the additional 2%. The maximum loan amount is $350,000 and there is an income limit up to 80% of the county’s area median income.
Conventional 97 mortgage
The conventional mortgage for first time homebuyers offers a fixed-rate mortgage with a minimum down payment of 3%, making it ideal for first-time homebuyers with limited savings.
FHA loans are insured by the Federal Housing Administration and offer down payments as low as 3.5%. They also have more flexible credit requirements compared to traditional mortgages
VA loans are available to veterans, active-duty service members, and their eligible surviving spouses, VA loans offer 0% down payment options.
These are backed by the U.S. Department of Agriculture and offer 0% down payment options for those purchasing homes in rural areas.
Down Payment Assistance Programs in Georgia
Apart from low down payment programs offered by mortgage lenders, there are also various down payment assistance programs available in Georgia. These programs offer financial assistance to eligible homebuyers, helping them cover the upfront costs of purchasing a home.
Some popular down payment assistance programs in Georgia include:
Georgia Dream Homeownership Program
This program offers up to $12,500 in down payment and closing cost assistance for first-time homebuyers who meet income and credit score requirements. The exact amount of assistance can vary based on the individual’s circumstances and the specific terms of the program at the time of application.
Atlanta Housing Down Payment Assistance Program
This program offers up to $20,000 in forgivable loans for first-time homebuyers purchasing a home within the Atlanta city limits. It also offers up to $25,000 in assistance for health, public safety, education and veterans. The loan can be used for down payment and closing costs.
City of Augusta Down Payment Assistance Program
Eligible homebuyers can receive up to $10,000 in down payment assistance through this program. The assistance is provided as a deferred loan with no monthly payments and is forgivable after five years of owning the home. The property must be located in the Augusta-Richmond county area
Gwinnett County HomeStretch Program
This program offers up to $7,500 in down payment assistance for first-time homebuyers with low to moderate incomes. The assistance is provided as a second mortgage loan with a 0% interest rate and no monthly payments. It becomes forgivable after five years of owning the home.
Chenoa Fund Program
This program offers a forgivable second mortgage loan to eligible homebuyers that can cover up to 5% of the down payment and closing costs. It also has flexible credit requirements and allows for gift funds to be used towards the down payment.
How do you know you are eligible for a down payment assistance program?
Eligibility requirements for down payment assistance programs can vary depending on the program and location. Some common factors that may determine eligibility include income, credit score, and geographical location.
You may be eligible for down payment assistance by fulfilling the following:
- You are a first-time homebuyer
- You have a minimum 640 credit score
- Your income does not exceed 80% of the area’s median income. Use this tool to check
- Your debts including the estimated mortgage payment should not exceed more than 49% of your take home income
General tips on applying for Georgia low down payment programs
To determine your eligibility for down payment assistance programs, we encourage to talk to a mortgage advisor to compare different options available in the area where you plan to purchase a home. It’s also important to gather all necessary documents, such as proof of income and credit score, before starting the application process.
Here at Andes Mortgage LLC , we offer several options of low to no down payment, down payment assistance programs and first time homebuyer grants in Georgia. Check your eligibility here.
Some general tips for navigating down payment assistance programs include:
- Research and compare different programs: As mentioned earlier, there are various down payment assistance programs available in Georgia. Take the time to research and understand the eligibility requirements, benefits, and limitations of each program before making a decision.
- Attend homebuyer education classes: Many down payment assistance programs require applicants to complete a homebuyer education course. These classes offer valuable information on the home buying process, budgeting, and credit management, which can be helpful for first-time homebuyers.
- Prepare all necessary documents: Make sure you have all the necessary documents ready before starting the application process. This can include proof of income, tax returns, bank statements, and credit scores.
- Stay organized: Keep track of all your documents and applications to ensure a smooth process. Make sure to respond promptly to any requests for additional information from lenders or program administrators.
Whether you are looking for a first time homebuyer loan in Georgia which offers a low down payment or you are in need of down payment assistance, know that you have several options available when it comes to financing a home. By researching and understanding the different programs, attending homebuyer education classes, and staying organized throughout the application process, you can increase your chances of securing down payment assistance and achieving your goal of homeownership.