Down Payment Assistance on the Rise for First-Time Home Buyers
DAPs are back.
Or, at least, making a comeback.
The use of down payment assistance programs (DAP) in the lending industry has doubled between 2013 and 2016 – the Wall Street Journal’s statement was released Sunday, following a citation from the Freddie Mac analysis of the National Survey of Mortgage Originations.
The survey also found that 13% of borrowers who used Federal Housing Administration mortgages in 2019’s first quarter received help with down payments. This is up 8.6% from five years earlier.
Although wages have increased throughout the country, it has still left little wiggle room for families to save for down payments.
Experts are weary of down payment assistance programs because they were one of the many factors that led to defaults in the real estate crash that began in 2007.
While DAPs are helpful for first-time homebuyers, it’s essential that rules and regulations follow strict guidelines for future payments.