Homebuyers have an appetite for information on down payment assistance, Zillow says

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The service, which connects homebuyers with down payment assistance programs, caused a stir among Zillow users when more than 1 million homebuyers searched a database maintained by technology provider Down Payment Resources.

Homebuyers have a strong appetite for information on down payment assistance, Zillow says
Zillow finds home buyers hungry for information on down payment assistance

When Zillow announced a year ago that it was partnering to integrate data from the Down Payment Resource into listings, the company said rising home prices made it difficult for buyers to save for a down payment, and many were unaware of programs that could help.

Metrics released Thursday by Zillow show that homebuyers are willing to submit some basic information about programs they may qualify for and how much assistance they might qualify for.

Aldona Klotti

“Saving for a down payment is the biggest hurdle for people looking to buy their first home,” said Aldonna Clottey, Zillow’s vice president of corporate social responsibility. press release. “Zillow is committed to empowering people to overcome such obstacles.”

Down payment assistance programs available through federal, state, county or local government agencies include down payment grants and low or zero interest second mortgages. Many government housing finance agencies offer affordable first loans in conjunction with down payment assistance.

According to Down Payment Source, all 3,143 U.S. counties have at least one down payment assistance program, and more than 2,000 counties have 10 or more programs. Program requirements, including income and credit limits, vary by market, making the Down Payment Resource a handy tool for homebuyers.

Rob Crane

“By partnering with Down Payment Resource, Zillow is doing an important job of raising awareness about these programs and giving consumers a tool that can make the difference between renting and owning a home,” said Rob Charen, founder and CEO of Down Payment Resource, in a statement.

The Down Payment Resource assistance program, which entered into a similar partnership with Redfin in October, integrates benefits and eligibility requirements with multiple listing services (MLSs), lenders and agents.

Since Charen founded the company in 2008, Down Payment Resources has seen demand for its services grow, as rising home prices make paying down payments a challenge — even for those with loans as low as 3 percent and as low as 5 percent. Percentage of purchase price.

An increase in house prices will increase the payment

As home prices rose during the pandemic, the average down payment increased 57 percent to $80,500, according to data compiled by Black Knight.

While the minimum down payment that homebuyers would pay on an FHA loan was $18,900 on average in July 2022, that was a 64 percent increase from $11,500 in February 2020, Black Knight data shows.

The average down payment for home buyers taking out loans backed by Fannie Mae and Freddie Mac increased 36 percent, to $95,300.

Homebuyers who didn’t qualify for Fannie and Freddie’s jumbo loans and other nonconforming loans spent an average of $294,600 in July, up 3 percent from before the pandemic.

Zillow says down payment assistance can help close the racial homeownership gap, and its partnership with Down Payment Resource is part of a social impact program aimed at increasing housing security and economic opportunity in underserved communities.

With only 45 percent of black households owning a home, “expanding down payment assistance, improving access to credit, and implementing policies to reduce bias in real estate have been identified as tools to help close this gap,” the company said.

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