Top 8 States for Down Payment Assistance on First Time Home Buyer Loans

Buying a home for the first time is a major financial goal for millions of American families, but not everyone has been able to save enough money for the down-payment in the aftermath of the recession. But the economy is growing stronger in 2017, and interest rates are low, so many people are tempted to take the plunge.

But what about making that down payment? How can you afford to put down thousands of dollars to buy your first home if you don't have any equity from a previous home?

down-payment home grants

There are many good states where you can buy your first home and possibly get some down payment help:

#1 West Virginia

This state saw the biggest boost in first time homebuyers in the last decade. From 2003-13, the number of first time buyers in West Virginia increased by 58%, and foreclosures have remained very low at under .02%.

One of the reasons this is a popular place to buy a home is that the home prices are very affordable, with a median price of $115,000. And it also offers programs to help first time buyers get into their first house. The Homeownership Program though the state's Housing Development Fund can offer up to 100% financing if you are a first time buyer and meet certain income requirements.

Home buyers also may use the Down Payment and Closing Cost Assistance program to secure a very low rate on a $15,000 loan to cover closing and down payment costs. Learn more about WVHDF that helps West Virginia first time home buyers get help with financing and down-payment grants.

#2 New Hampshire

More people bought their first home here than in almost any other state. The number of first time home buyers increased by 90% from 2003-13. While the median home price here is $224,000, it is still much cheaper than paying rent; you will pay a median mortgage payment of $1,060 on a 30 year first time home loan here, compared with $1,250 for rent.

State programs in New Hampshire can give a big boost to first time home buyers. One of the options is the Home Preferred loans that allow borrowers to obtain a mortgage with a low 3% down payment. This program also can provide mortgage insurance coverage so you do not have to pay as much yourself.

First time homebuyers in New Hampshire also can get a tax credit of $2,000 for those who are buying a home for the first time. Ask about the HomeFlex program for first time house buyers in New Hampshire.

#3 Rhode Island

Rhode Island has seen huge growth in the numbers of first time homebuyers. The rate of first time homebuyers has gone up 98% in recent years, and it has a low foreclosure rate at only .06%.

Rhode Island also has a big gap between a typical mortgage payment and rent. The median rent here is $1,400, and the monthly 30 year mortgage payment is $1,030.

If you want down payment help, you can take advantage of the state's FirstHome lending program that will make borrowing easier. You can get no money down options and also help with your closing costs. Rhode Island also offers First Home loans that will allow you to qualify for a tax credit of as much as $2,000 for the entire life of the loan.

#4 Wyoming

Wyoming real estate is cheaper overall than many states on the East and West Coasts. The median home price is only $179,000. The growth of first time home buyers there has been average at only 48% in the last 10 years.

There are several programs available at the state level that will help people qualify for first time home loans. The Wyoming Home Again Program offers lower mortgage rates for new house buyers. Also, Wyoming's Down Payment Loan Program can provide a loan of up to $10,000 to cover a down payment.

#5 Maine

Maine is a quite inexpensive state in which to own a home. The median value of a home there in 2015 was only $118,000. It is especially inexpensive when you consider that home values in other northeast states are much higher, such as Massachusetts and New Jersey.

Because of the low property costs, a 30 year first time home loan can cost you only $560 per month, while renting would cost you $1,225.

The number of first time buyers in Maine grew by 51% in recent years. The First Home Program offers very low interest rates and 100% financing for those who qualify. Check HUD for Maine homeownership assistance details.

#6 Arizona

Arizona saw excellent growth in first time buyers in the last decade at 63%. There have been more foreclosures here so that has made the state slightly less attractive for home buyers.

The Home Plus Home Loan Program is available to assist first time homebuyers to get down payment help for up to 4% of the loan amount.

Arizona has quite low property values, with the median home valued at $191,000 and a median sale price of $204,000. Get more Arizona down-payment assistance info from Arizona Dept. of Housing.

#7 Washington DC

Housing in Washington DC is probably the most expensive of any on this list. The median sales price for a home here is $512,000. And the median home value of $487,000 shows that this is more of a seller's market today. The Department of Housing and Community Development offers several home buying grants for DC first time buyers.

Renting can often beat buying a home here; the median rent is $2,285 while the median mortgage payment is $2,420.

Still, the foreclosure rate here is very low, and there are many government programs that can offer you down payment help.

One is the Home Purchase Assistance Program. This program will provide as much as $50,000 in gap financing and $4,000 in help with the down payment.

#8 Massachusetts

There has been a 74% jump in first time homebuyers since 2003. The median home price here is $324,000 and the median sales price is $309,000. So you may be able to pay under market value.

Massachusetts has good first time home buyer loan programs, such as MassHousing.com. It offers mortgage payment protection that will cover $2,000 per month in mortgage and interest payments for six months if you lose your job.

You also can get help through the ONE Mortgage Program. It offers down payment help through the MA Housing Partnership Fund.

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