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Down Payments: A Daunting Obstacle

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One of the biggest obstacles we run into with locals trying to buy a home is the lack of a down payment. Despite the widely held misperception that a 20 percent down payment is necessary to purchase a home, there are alternatives for potential buyers.

On a national level, the Department of Veterans Affairs has programs for veterans with zero down payment and the Department of Agriculture offers loans with no money down to qualified applicants. Locally, the Sierra Business Council just announced the return of the Martis Fund Homebuyer Assistance Program. This fund is restricted to buyers who do not own a home, currently work in our region, and want to live locally. The fund provides up to 10 percent of the purchase price or $50,000 in down payment assistance, whichever is less.

The property must meet certain criteria and the applicant must qualify for the Martis Fund, as is required for any such program. The home can be a duplex, single-family residence, townhouse, or condominium with or without a lock-off. Mobile homes would not qualify, as the dwelling structure must be on a permanent foundation on a homesite, and not in a park. The buyer must be the owner occupant and it cannot become a rental property. There are properties for sale all over our region under $350,000 that would be suitable full-time residences.

Interest rates are heading up and the cost of buying is getting more expensive as each day goes by. Speaking with a local lender is the first step. Please do not go online to see if you are eligible for any down payment assistance programs since they cannot help you on a regional level. A lender in the immediate area can point you in the right direction so you’ll be ready to make a move when the timing works. Don’t let the lack of a down payment discourage you.

The Martis Fund was established in 2006 to promote opportunities for workforce housing and was last available in 2014. Once the current $500,000 in funding is depleted, it is unknown when additional money will be available. As we say in real estate, time is of the essence.

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March 14, 2019