Buying a home can seem overwhelming because it feels like you have to save up so much money to do it. Will you ever save up the money for closing costs and a down payment, much less have money left over in the bank to deal with new homeowner emergencies?
The good news for you is that there are local down payment assistance programs to help you get in a home of your own. These programs can help you buy a home a lot sooner than you might be able to otherwise by giving you money, lending you extra money, or some combination of the two. Ready to hear how they can help you become a homeowner?
Utah Housing Corp
If you’re interested in a Utah Housing Corp loan, you’ll talk to a participating lender, who will go ahead and see if you qualify for this down payment assistance program. Be sure to tell them that you are interested in qualifying for a Utah Housing Corp Loan. Find a list of participating lenders here.
Utah Housing Corp has four different down payment assistance options, and three of them are for buyers who have already owned a home before. Let’s dive in!
The FirstHome loan is only for first-time homebuyers. You can borrow up to 6% of your mortgage amount for closing costs and the down payment.
This money actually becomes a second mortgage. It’s a 30-year loan, and the interest rate is 2% higher than the rate on your primary loan.
This loan can be done on FHA and VA loans anywhere in Utah. But the home must be your primary residence, and there are income and purchase price limits that your lender can discuss with you.
The HomeAgain loan is open to homebuyers who need some help coming up with a down payment and closing costs. It allows you to borrow up to 6% of the primary loan as a fixed-rate second mortgage.
This money becomes a second mortgage. It’s a 30-year loan, and the interest rate is 2% higher than the rate on your primary loan.
Again, this loan can be done on FHA and VA loans anywhere in Utah. The home must be your primary residence, and income and purchase limits apply.
The Score Loan is for first-time and repeat buyers who don’t meet the credit requirements for the FirstHome and HomeAgain loans. Those loan programs require a minimum credit score of 660, while the Score Loan program allows credit scores as low as 620 (though all FHA or VA loan requirements must still be met).
This program allows you to borrow up to 4% of the first mortgage’s total for closing costs and a down payment. The money becomes a second mortgage. It’s a 30-year loan, and the interest rate is 2% higher than the rate on your primary loan.
This loan can be done on FHA and VA loans anywhere in Utah. The home must be your primary residence, and income and purchase limits apply.
This program requires that you attend a homebuyer education class. Here is a list of approved classes.
The NoMI loan program is for conventional loans and prevents buyers from having to pay monthly mortgage insurance.
It also allows borrowers to take out a second mortgage (at a 2% higher interest rate than the first mortgage) to pay for closing and down payment costs.
This can be done on Fannie Mae conventional loans in the state of Utah. Maximum income limits apply, and you must have a credit score of 700 to be eligible.
City of West Jordan
The City of West Jordan has a program to help first-time homebuyers (which means that you cannot have owned a home in the past 24 months). This down payment assistance program requires you to complete a HUD homebuyer class prior to closing on the home.
This program is for owner-occupied family homes, condos, and townhouses. Manufactured homes, duplexes, and multi-family units are not eligible.
Borrowers must put a minimum of $2,000 out of pocket toward the home’s closing. The city will contribute up to $7,500 (up to a maximum of 50% of the down payment and closing costs.) If you stay in the home for five years, the grant is forgiven, and you owe nothing. If it’s sold earlier, the amount you owe will be reduced by 20% for each year you lived in the home. The balance of the grant will be due in full upon the sale of the home.
This program has income limits, which are listed here. A family of four is eligible for the program up to $64,000 in income. Additionally, housing debt can’t exceed 35% of total household income, and all debt can’t exceed 45% of total household income.
If you haven’t owned a home in the past three years, you may be eligible for Davis County’s down payment assistance program. This program requires the completion of a HUD homebuyer course.
You’ll receive up to $10,000 (up to a maximum of 50% of your down payment and closing costs). The grant will be forgiven in full if you live in the home for five years. The grant declines while you live in the home, so if you sell it or move out sooner, you’ll owe just part of the balance. It will be due in full at the time you leave the home.
A family of four is eligible if household income is less than $68,000 per year. Single-family homes, condos, and townhouses are eligible, but manufactured homes, new construction homes, and multi-family dwellings are not. The price of the property cannot exceed $325,000.
Important note: Homes in Clearfield and Layton are not eligible for this down payment assistance program.
West Valley City
This assistance program is open to first-time homebuyers who want to relocate to West Valley City.
The city will give you a grant of up to $7,500 for the purchase of a home that is your primary residence. The total grant amount is determined by the amount due at closing, and buyers must spend at least $2,000 of their own money.
Requirements include being at or below 80% of median income in the area as determined by HUD. Housing debt must not be more than 31% of total income, and all debt must not be more than 43% of income.
Own in Ogden helps those who want to live in Ogden purchase a home, and they do not have to be first-time buyers.
The buyer must put down at least $500 toward the down payment and closing costs. Borrowers are eligible for up to $5,000, which is due in full at the sale of the home or when leaving it as a primary residence. Ogden City police, firefighters, and K–12 teachers are eligible for up to $10,000 in assistance.
This home must be your primary residence, but many types of homes are eligible, including multi-unit dwellings. The purchase price cannot exceed $242,000 for single unit, and limits increase for duplexes, triplexes, and four-plexes.
For a family of four, income must be under $68,000. Debt is capped at 47% of income.
Community Development Corporation of Utah
Community Development Coroporation Grants
The Community Development Corporation of Utah provides assistance to homebuyers in Salt Lake County (except for Sandy, West Jordan, South Jordan, and West Valley City), Taylorsville, and Salt Lake City.
There are no funds currently available, but funds for assistance grants will be available again later this fall on a first-come, first-served basis.
Buyers contribute 1% in personal funds before receiving assistance, which varies by area. Maximum purchase prices also vary by area.
Salt Lake: Up to $14,000, forgiven after five years
Taylorsville: Up to $7,500, forgiven after five years
Salt Lake County: Up to $10,000, forgiven after five years.
General requirements for all areas include income at 80% or below of the median in the area ($64,000 for a family of four), debt of 45% or less of monthly income, and no homeownership in the past three years. Homes must be owner occupied, as well.
The CDCU also has a program for first responders, nurses, and teachers in Salt Lake. The program offers assistance up to 3–5% of the purchase price. It must be paid off when the home is sold or the mortgage is fully paid. Funds are still available for this program.
Are You Thinking of Buying?
Are you thinking of buying a home? It might be closer within your grasp than you think. If you have any questions about the process, please get in touch with me at any time. I’m happy to help make your dreams of homeownership a reality.