If your income and nest egg are making home buying a challenge, consider these options:
- Down payment assistance programs provide loans or grants to cover all or part of your down payment. National programs include the American Dream Downpayment Fund from the U.S. Department of Housing and Urban Development (http://www.hud.gov) and the Nehemiah program (http://www.getdownpayment.com).
- Inquire about seller financing. In some cases, sellers may be willing to finance all or part of the purchase price of the home and let you repay them gradually, just as you would with a mortgage.
- Consider a shared-appreciation or shared equity arrangement. You can recruit your friends, family or a third-party to buy a portion of the home and thus share in any appreciation when the home is sold. The majority owner/occupant will typically pay the mortgage, property taxes, and all maintenance costs, but all investors are typically on the mortgage. (Sidenote: investor-search firms can help you find an investor.)
- Lease with the option to buy. In many cases, owners will apply a percentage of paid rental income toward the purchase price.
- A short-term second mortgage can help you make a higher down payment. This may be possible if you have little or no debt, as well as high-income demonstrated over a period of time.
