Here’s where you can get help with your down payment

Surveys of first time buyers routinely show that saving for a down payment is one of the biggest hurdles on the way to homeownership. But those buyers may well misunderstand how much cash they actually need to save.

“Paying 20 percent down is, quite frankly, a myth,” Karen Hoskins, vice president at NeighborWorks, told HouseLogic. “Most buyers pay only 5 percent to 10 percent down—some even pay zero.”

The reason some buyers pay zero is due to the availability of a number of down payment assistance programs that can help them break into homeownership. In fact, some 69 percent of homebuying programs tracked by Down Payment Resource actually provide monetary assistance. The average amount of financial aid received is above $11,000.

HouseLogic in a recent article lists several such programs where buyers can apply for down payment assistance, including some government-backed programs. For example, the Federal Housing Administration provides loans to first time buyers at interest as low as 3.5 percent. Then there’s the USDA Rural Development Loans and VA Home Loans programs, which provide zero down payment loans.

Fannie Mae and Freddie Mac also provide loans, allowing buyers to put down just three percent of the purchase price on their home. In cases where buyers pay down less than 20 percent of the home’s value, they’ll need to pay for private mortgage insurance so as to protect the lender.

Numerous state and local programs exist too. Forms of assistance include forgivable loans and grants, as well as soft mortgages, wherein the down payment assistance loan is deferred for some time based on the requirements of the program.

HouseLogic recommends using a service called NeighborWorks to find the most appropriate program, as it provides housing counselors who can discuss the various options for free. Meanwhile Down Payment Resource allows buyers to check their eligibility for a range of programs. Mortgage brokers should also be able to supply buyers with information about programs in their area and help determine eligibility.