6 Creative Ways to Afford a Home
1. Investigate local, state, and national down payment assistance
programs. These programs give qualified applicants loans or grants to
cover all or part of your required down payment. National programs
include the Nehemiah program, www.getdownpayment.com, and the American
Dream Down Payment Fund from the Department of Housing and Urban
Development, www.hud.gov.
2. Explore seller 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 would do with 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 share in any appreciation when the home is sold.
The owner/occupant usually pays the mortgage, property taxes, and
maintenance costs, but all the investors' names are usually on the
mortgage. Companies are available that can help you find such an
investor, if your family can’t participate.
4. Ask your family for help. Perhaps a family member will loan you money
for the down payment or act as a co-signer for the mortgage. Lenders
often like to have a co-signer 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.
6. Consider a short-term second mortgage. If you can qualify for a
short-term second mortgage, this would give you money to make a larger
down payment. This may be possible if you’re in good financial standing,
with a strong income and little other debt.
