Down Payment Assistance Resources
By Drew McDaniel 11/21/2023
House prices have gone up significantly, and Columbus, Ohio is no exception. Median home prices have increased 216% in Columbus over the past 23 years, while median household income has increased by only 43% in that same time period. This disproportionate increase in prices and income have left many hopeful first time homebuyers behind.
Not only can the average person afford less house, but the amount needed for a down payment has significantly increased. Many first time homebuyers simply go use their local bank, and there is nothing wrong with this. I used my local bank, US Bank, when I bought my house. Sadly many first time homebuyers are missing out on down payment assistance programs that some of these lenders do not offer.
Due to these missed opportunities I wanted to bring awareness to a couple I am aware of and a lender capable of helping with both of these down payment assistance programs. The programs are Ohio Housing Finance Agency (OHFA) and the American Dream Downpayment Initiative (ADDI).
I would like to thank Derek Harris at Equitable Mortgage for taking the time to help me understand these programs. Both are options at Equitable Mortgage. Derek can be reach at 614-352-8895 or derekh@eqfin.com. Keven Moses of US Bank also does great work and can work with OHFA. Kevin can be reached at 614-395-8741 or kevin.moses@usbank.com.
OHFA
OHFA is an amazing resource for homebuyers. One of the great programs available through OHFA is the Your Choice! Down Payment Assistance. In Franklin County the income limits on this program are $121,320 for a one or two person family and $141,540 for a three or more person family. There are purchase limits based on differing criteria, but homes under $498,220 are generally applicable. There are other programs available with this program that can alter income and price limits. Generally a credit score above 650 meets eligibility requirements. Homebuyers are required to take a free homebuyer education course to receive the down payment assistance.
This program allows homebuyers to choose either 2.5% and 5% of the home’s purchase price. Now one specific stipulation is that you own the home for seven years for the assistance to be forgiven, if the house is sold before that time frame the assistance will be paid back during the sale of the property. This program will put a second position lien on the house so any type of second mortgage or equity line of credit would not be available within those seven years unless it was paid off by that new loan.
Homebuyers can couple this program with the Mortgage Tax Credit program if the 2.5% assistance is chosen. Having a mortgage officer who is versed in these programs can help you decide which one makes the most sense.
ADDI
ADDI is a program through the City of Columbus that provides funds (up to $7500) to low to moderate income first time homebuyers for down payment assistance. The home must be located in the City of Columbus and the homebuyer must live in the home for at least five years as their primary residence for the loan to be forgiven. This places a lien on the property like the OHFA program, but unlike OHFA the ADDI loan can take a third position behind an OHFA lien for both to be used together. The website states that funds are limited and are available on a first come first serve basis.
Similar to an OHFA down payment assistance program, the prospective homebuyer must go through a HUD class on home ownership and meet income requirements. The homebuyer can be considered a first time home buyer if they have not owned a home in the last thirty-six months. Also the buyer must be a resident of Ohio and a permanent resident of the United States.
The ADDI assistance loan is no more than 6% of the purchase price of a home up to $7500. A house of $125,000 or more is eligible for the full amount.
If you have any questions please reach out as I would love to help!