Homebuyers: Don’t Be Scared of the Down Payment!

Making a down payment on a home is a frightening prospect. It’s not often you have to put out such a large chunk of money at one time. Coming up with the amount of money you need for the percentage of the purchase price you will have to make up front can feel overwhelming. Especially since there will also be closing costs, fees and taxes to pay at settlement in addition to the down payment.

Hopefully, this will calm your fears. There are resources to assist you in coming up with the down payment for your new home. Many people think you must have 20% of the purchase price as your down payment. That is not true. Eligible buyers can make as little as a 3-5% down payment and with some loans, you don’t have to make one at all!

Here are three ways to come up with the down payment for your new home:


Also known as  “DPA”, “secondary financing”, or “second mortgage”, down payment assistant programs are low or no interest loans, grants and tax credits that may cover some or all of your down payment. A bonus is that these funds might be able to be applied to your closing costs as well. Federal, state, county or local government agencies, nonprofits, and employers offer DPA programs. The availability and qualification requirements are different depending upon which state you are in.

Homeownership Down Payment Assistance Program in Virginia

  • If you see that there is a DPA requirement of being a “first-time homebuyer”, keep in mind that it means those who have not owned a home in the previous three years.

These are loans that are guaranteed by the U.S. Department of Veterans Affairs (VA). They are for eligible members of the U.S. military (active duty, veterans, National Guard and Reservists). Surviving spouses are eligible as well. With these loans, there is no minimum down payment, mortgage insurance or credit score requirement, but you will be responsible for a funding fee which could be from 1.25 % to 3.3% at closing.


Money that you have been gifted by close friends and family members can be used to go towards a down payment to help finance your new home. There are different requirements depending upon the loan program regarding acceptable donors and documentation, but some rules apply regardless of the program:

  • The donor must not have financial interest in the home purchase.
  • You and the donor will have to provide documentation such as a signed gift letter and bank statements.
  • Cash for gift funds must be in your account for at least 60 days prior to the purchase of the home.

For more information check Va Home Loan Down Payment Facts.

If you have a desire to buy a new home, but you’re not sure if you can swing down payment, talk to Professional Realtor Desi Sowers. With her knowledge and expertise, she help you understand the homebuying process and the best way to get started!

If you are thinking about buying or selling a home in the New River Valley area, contact professional, experienced Realtor Desi Sowers and let her assist you with all your real estate needs. Give her a call today at 540-320-1328!

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