Down Payment Resource [1], a nationwide databank for homebuyer programs, released its Q4 2016 Homeownership Program Index (HPI). The HPI revealed that number of total down payment assistance programs has increased to 2,463, which is a 2.8 percent increase from Q3, 2016.
Down payments remain a concern among many potential homebuyers, and to stop homeowners from tapping into retirement funds, down payment programs have provided relief for those who are in need of assistance. The press release sources the most recent National Association of REALTORS Profile of Home Buyers and Sellers, which states that 14 percent of first-time homeowners have either used loans or disbursements from their 401k or IRA accounts for down payments last year. However, approximately 3 percent of homeowners are utilizing resources available to them, such as down payment assistance programs.
Rob Chrane, CEO of Down Payment Resource, commented on the future of down payment programs and the significance they hold for first-time homebuyers. “Homeownership program availability and funding remain strong in 2017. With recent increases in the mortgage interest rate and no reduction of the FHA mortgage insurance premium, entry level homebuyers will need access to important down payment programs that can help them save,” he said.
According to the report [2], the HPI also saw an increase in Mortgage Credit Certificates (MCCs) across the nation, which represents more than 8 percent of all programs. Data from National Council of State Housing Agencies (NCSHA) shows that state housing finance agencies increased MCC issuances to homebuyers by more than 400 percent between 2010 and 2015. Currently, there are 200 different MCCs available in the U.S., which is up from 190 in the previous quarter. The report also states that 93 of the MCCs are available state-wide and 107 are available in a defined local market while 37 states contain either a state-wide MCC or another type of local MCC.
Chrane encourages homeowners to become aware of MCCs and the impact it has on their financial status. “The mortgage interest rate tax deduction has long been a core homebuyer benefit, but most homebuyers are unaware of Mortgage Credit Certificates. This credit directly impacts a homebuyer’s bottom line by reducing their annual tax bill,” he said. “We see more lenders adding MCCs to their product offerings.”
The report stated that Texas, California, and Florida contain the greatest number of MCCs. To view the complete state-by-state list of program data, click here [3].