Learn How To Start Investing In Real Estate
Learn How To Start Investing In Real Estate

87 Percent Of U.S. Homes Qualify For Down Payment Assistance

Written by Than Merrill

With the worst of the housing crisis behind us, U.S. real estate is assuredly on the path to recovery. However, many would argue that Millennial participation within the housing market is required to foster a sustainable rebound. In other words, a full recovery shouldn’t be expected until younger Americans and first-time buyers actually start to make up a larger portion of the market.

The good news is that the percentage of Millennials that made up first-time buyers in 2014 is at its highest level in years. Moreover, programs to aid buyers are more readily available than ever. Even the amount of houses that qualify for down payment assistance is encouraging. According to RealtyTrac, 87 percent of homes in the U.S. qualify for some form of down payment assistance.

According to data released by RealtyTrac, “out of more than 78 million U.S. single family homes and condos in 1,792 counties with sufficient home value data, more than 68 million (87 percent) would qualify for a down payment program available in the county where they are located based on the maximum price requirements for those programs and the estimated value of the properties.”

News of the assistance programs is more than comforting for Millennials on the fence about purchasing a home. Perhaps even more importantly, it may help many younger Americans realize that they actually can afford a mortgage. In fact, the following counties represent the top 10 in which the most homes qualify for down payment assistance:

Of the cities that made the top 10 list, Wayne had the highest percentage of homes that qualified for down payment assistance programs, with more than 94 percent of the homes making the cut. Both Dallas and Harris Texas were just behind Wayne with 93 percent of the homes qualifying. Los Angeles actually had the lowest percentage of homes qualify, with 78 percent. These cities are, and should remain, some of the top choices for individuals looking to secure down payment assistance.

“Post downturn generations are typically more frugal, and today’s homebuyers accordingly have lower backend debt-to-income ratios and subsequently more buying power then the last generation, but most have little money for down payments,” said Mark Hughes, Chief Operating Officer at First Time Real Estate, covering the Southern California market. “More than half the interested buyers in our agents’ pipelines are more concerned with pulling together today’s required down payment than meeting the income-to-debt ratio requirements.”

Of course, where there are good cities to secure down payment assistance, there are also bad ones. New York, NY is the worst city for homes that qualify. In New York (Manhattan), just over 28 percent of the homes qualify for down payment assistance. Just ahead of New York, however, is the vaunted San Francisco market. With just 33 percent of the homes qualifying for down payment assistance, San Francisco ranks second to last.

“In our market the greatest obstacle for buyer’s getting into the market is competition and lack of inventory. In many cases FHA and low money down buyers are getting beat out in multi-offer situations by buyers with at least 20 percent down and cash buyers,” said Greg Smith, owner/broker at RE/MAX Alliance.

So while homes may be appreciating at historically high rates, first-time buyers should take comfort in the fact that these programs exist.