As the year draws to a close, states are ramping up efforts to provide more down payment assistance (DPA) programs to support first-time buyers in achieving their dream of homeownership.
Down Payment Resource recently unveiled its latest Homeownership Program Index (HPI) report for the third quarter of 2024, showcasing an increase of 29 new DPA programs. This marks a 1.2% boost from the previous quarter and an 8% rise from last year, bringing the total number of programs to 2,444. Notably, California leads the pack with the highest number of first-time buyer programs and available funding. Additionally, there has been a 5% increase in programs tailored for first-generation homebuyers between the second and third quarters.
The report also shed light on presidential candidate Kamala Harris’ housing policy proposal, which specifically targets first-time buyers by aiming to add 3 million affordable housing units, provide $25,000 in down payment assistance, and offer additional resources.
Founder and CEO of Down Payment Resource, Rob Chrane, emphasized the importance of these programs in aiding first-time buyers. He stated, “We are pleased to see a growing number of these programs, and think they are becoming a targeted way to help first-time and first-generation homebuyers struggling to save for a down payment get into a home they can afford.”
Furthermore, the report highlighted an increase in DPA programs targeting first-time homebuyers with access to below-market-rate homes, showcasing an 8% quarterly rise in below-market-rate (BMR) and resale programs. These homes come with deed restrictions to ensure lower prices in exchange for affordability.
In terms of funding sources, grant-funded programs saw a 7% increase in the second quarter, with municipalities leading at 39%, followed by nonprofits at 21%, and housing finance agencies at 19%. Borrowers interested in multiunit properties also have more options, as DPA programs supporting the purchase of two-, three-, and four-unit properties rose by 7% in Q3 2024.
While the number of first-time buyer assistance programs has been on the rise each quarter, the landscape could potentially shift with the end of the election season and fluctuating mortgage rates.