Buying a House Using a Government Grant
The year is 2017, and the housing market, fairly typical. There was average competition, room for negotiation, and a surplus of inventory. Buying a house felt like the methodical and logical process it should be, where we can factor in everything. We happened across a down payment assistance program, and it was the BEST factor for our house buying journey. Here’s why:
The program was called the Sapphire Grant (now discontinued). They paid 3% or 5% of your down payment by using the program, which meant we could get into the home with literally none of our own money saved up.
This was really helpful since we had recently graduated college and had minimal savings. Rent in our area for an average 2 bedroom apartment was almost as much as a house mortgage, so we wanted to be paying into ourselves over time, not a landlord.
Fortunately, my husband’s uncle was a mortgage loan officer and knew about this program. He wasn’t sure we’d be able to qualify, but did some research and as it turns out, the sapphire grant was still available for use–yay! Everything went smoothly and we purchased our little townhouse. (Picture below.)
But why is this important or helpful? Two reasons.
Reason 1: Your husband doesn’t need to have a mortgage broker uncle to know about these programs. In retrospect, it seems like a wild coincidence that we were able to take advantage of this opportunity. It shouldn’t be. That’s why Stairs was created. These programs exist to help get people into their first home, but the programs themselves don’t feel easily accessible. With Stairs, they are. We help you find any of the programs you qualify for in the area, for free!
Reason 2: Fast forward 2 years later, we were ready to upgrade our living situation for some more square footage and a yard. The housing market had shifted and our little town house was now selling for $70k more than we bought it for. $70,000. That is $35,000 per year. For doing absolutely nothing other than living in it. I’d say that’s a pretty good investment for two years.
This is the power of home ownership. And this is what government assistance programs are trying to help you achieve.
Now, I’ve told you all the good. But there are a few things to know about these programs. Well, really just one thing. They can have very specific requirements.
For our grant, we had to (1) have a 620 or higher credit score, we were required to (2) live in the home for a minimum of 2 years as our primary residence, we had to (3) use an FHA loan, and if we opted to receive the 5% down for our house, we were (4) locked in at a 4.5% interest rate. (This number seems pretty normal if you’re reading it in a post covid 2022 world, but at the time, interest rates were closer to 2-3% in our area so this was a big sacrifice.)
Regardless of these stipulations, we chose to buy the house using the sapphire grant and it was the best choice for us. Down payment assistance programs come in all shapes and sizes. Generally, the real estate market just has a lot of potential and opportunity for home owners, but especially for first-time home buyers. Look at your options, talk with the folks here at Stairs, and make the best decision for you.
(If you’re curious, you can read up on the whole program here: https://findmywayhome.com/assistance/nhf-sapphire-grant-program/)