Home Buying
New initiative offers to chip in 2% at a time when home affordability has never been worse.
First-time buyers account for about half of all home shoppers, according to Zillow’s 2023 Consumer Housing Trends Report. – Adobe Stock
By Cameron Sperance — Boston.com correspondent
September 12, 2023 | 10:33 AM
The cost of buying a home is at an all-time high thanks to mortgage rates more than double what they were two years ago, a dearth of listings, and prices that don’t appear to be buckling under that pressure.
The median sales price of a single-family home in Greater Boston alone rose to $910,000 in July — a monthly record for the region, according to the Greater Boston Association of Realtors. This is at a time when first-time buyers account for about half of all home shoppers, according to Zillow’s 2023 Consumer Housing Trends Report.
In late August in Arizona, Zillow launched a program aimed at making homeownership more obtainable, an initiative that offers borrowers 2 percent of the overall home price to put toward a mortgage. This means someone can put down 1 percent, and the Zillow Home Loans contribution will help the borrower get to the minimum 3 percent down usually required for those with good credit to obtain a home loan with a lender.
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“The rapid rise in rents and home values means many renters who are already paying high monthly housing costs may not have enough saved up for a large down payment, and these types of programs are welcome innovations in lowering the potential barriers to homeownership for those who qualify,” Orphe Divounguy, a Zillow Home Loans economist, said in a statement.
There are eligibility requirements to utilize the program: Participants must be first-time home buyers, complete a homeownership education course, and purchase a single-family, primary residence. There are also income prerequisites — Zillow would not provide the details — and a credit score requirement of at least 620 (typically the lowest score lenders accept).
Keep in mind: Lenders may require borrowers with lower credit scores to put down more than 3 percent. Borrowers can put down as much as 5 percent under the Zillow program.
The Zillow program is available only in Arizona for now, but a company spokesperson said there are plans to expand to other states. The 2 percent down payment assistance is paid at closing, not directly to the borrower.
Down payment assistance is a lifeline at a time when inflation remains elevated. The Federal Reserve kept raising the interest rate in attempts to tame it, but home prices show no signs of going down in Massachusetts. ”Wi …
See the full Home Prices article, or, read more Arizona real estate investing news. Go ahead. You know you want to.
