6 Creative Ways to
Afford a Home
If your income and savings are making homebuying a
challenge, consider these options.
1. Investigate local, state, and national downpayment
assistance programs. These programs give loans or grants
to cover all or part of your required downpayment.
National programs include the Nehemiah program,
http://www.getdownpayment.com, and the
American Dream downpayment fund from the Department of
Housing and Urban Development. http://www.hud.gov/news
/release.cfm?content=pr02-014.cfm
2. Get the seller to provide 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
do with a mortgage.
3. Consider a shared-appreciation, or shared equity,
arrangement. Under this arrangement, your family, friends,
or even an third-party may buy a portion of the home and
thus 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. There are companies that can help
you find such an investor if your family can’t participate.
4. Get help from your family. Perhaps a family member
will loan you money for the downpayment and/or act as a
cosigner for the mortgage. Lenders often like to have a
cosigner 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 downpayment. 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. See if you can qualify for a short-term second mortgage
to give you the money to make a higher downpayment.
This may be possible if you have a good income and little
other debt.
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