If you've found your Orlando dream home, but don't have the money for a down payment, you may want to consider using a Central Florida down-payment assistance program to help make that dream come true.

What is down-payment assistance?

Down-Payment assistance is a program provided by non-profit organizations to help low-income families acquire the down payment, closing costs and other up-front expenses required to purchase a home. It may surprise you to know that almost one fifth of borrowers with an FHA mortgage utilize a down-payment assistance program.

The three most recognized non-profits offering down-payment assistance are AmeriDream Inc., Partners In Charity, and Nehemiah.

For first-time homebuyers, I should start at the beginning by explaining what a down payment is and why it is often required.  A down payment is money a home buyer must come up with out of his or her own pocket in order to qualify for a mortgage.  It is typically anywhere from 3% to 20% of the home's purchase price.  In the past, 20% was most commonly required, but to make home ownership more accessible, requirements have been relaxed.  Today with an FHA loan, the down payment can be as low as three percent.

Lenders require a down payment in order to reduce their risk of the borrower defaulting on the loan.  The more money someone has invested in their home, out of their own pocket, the less likely they are to just walk away.  Also, as we're currently seeing prices fall in many areas of Orlando, Central Florida and around the country, lenders want a down payment to ensure they are not lending more than what the home will be worth in 6 months.

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How To Buy The Most Home For Your Money In Orlando Florida

You're neither rich nor poor, and you're ready to buy your first home in Orlando Florida. You look around...So many homes on the market in Central Florida! All seemingly priced out of reach!

Cheer up. You're not alone. With some solid real estate counseling and some help from lenders and/or home sellers and others, you can not only get your toe in the door, but you can own the house too. It just takes some creativity, a few inside tips from a top real estate agent, and a bit of homework. 

Examine your goals

How ironclad are your dreams? Can your ideal of a formal dining room or a hot tub on a redwood deck be postponed? Must you have a two-car garage? Lowering your expectations and starting out modestly (in good housing that meets your needs) can lead to owning those dreams -- in time.

Start saving for a down payment or closing costs

Get your priorities straight. Without taking all the fun out of life, what's more important to you, weekends on the road and dinners out or stashing away at least part of your down payment for your new home? (Although 100% financing is still available, most lenders want to see that some of the money you invest is your own...and it will dramatically reduce your monthly payment!)

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The Huffington Post recently reported:

The debate over the future of the program comes amid uncertainties about whether the budding recovery can be sustained once government supports are removed. At the December meeting, Fed policymakers decided not to make any changes to the program. At their September meeting, they opted to slow the pace of the purchases, wrapping them up by the end of March, rather than the end of 2009.

What does this mean to home buyers?   It means that the days of historically low interest rates are limited.

Read Also:  Rates Still at Record Lows Thanks to Fed

Right now we cannot say how long interest rates will remain historically low. This is dependent upon the US economy and how much longer it remains in recession. As soon as economy recovers and inflation returns, interest rates will to rise quite quickly.

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WASHINGTON - Sept. 4, 2009 - Rates for 30-year home loans edged down this week, remaining close to record lows reached over the spring.

The average rate for a 30-year fixed mortgage was 5.08 percent, down from 5.14 percent a week earlier, mortgage company Freddie Mac said Thursday.

Rates, while above the record low of 4.78 percent hit in the spring, are still at attractive levels for people looking to buy a home or refinance.

"Low mortgage rates are helping to keep housing very affordable," Frank Nothaft, Freddie Mac's chief economist, said in a statement.

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WASHINGTON, June 03, 2009

A secondary mortgage market model that includes some level of government participation is necessary to ensure affordable and available home mortgages. That is the message the National Association of Realtors^® delivered during a House Financial Services Subcommittee hearing today.

"Fannie Mae and Freddie Mac serve an important role in expanding homeownership and providing a solid foundation for our nation's housing financial system," said Realtor^® Frances Martinez Myers, who spoke on behalf of NAR. "Unlike private secondary market investors, Fannie and Freddie remain active in housing markets during downturns, using their federal ties to facilitate mortgage finance and support homeownership opportunities for all qualified borrowers."

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