SOURCE: RealtyTrac

RealtyTrac

February 04, 2015 00:01 ET

87 Percent of U.S. Homes Qualify for Down Payment Help According to RealtyTrac and Down Payment Resource Analysis

Counties in Mississippi, Inland California, Chicago Suburbs Post Highest Percent Qualifying; Manhattan and Four San Francisco-Area Counties Post Lowest Percent Qualifying

IRVINE, CA--(Marketwired - Feb 4, 2015) - RealtyTrac® (www.realtytrac.com), the nation's leading source for comprehensive housing data, today released a joint analysis with Down Payment Resource on the availability of down payment programs across the country, which found that 87 percent of U.S. homes qualify for down payment help.

RealtyTrac looked at 2,290 down payment programs from Down Payment Resource's Homeownership Program Index and found that out of more than 78 million U.S. single family homes and condos in 1,792 counties with sufficient home value data, more than 68 million (87 percent) would qualify for a down payment program available in the county where they are located based on the maximum price requirements for those programs and the estimated value of the properties.

"Many homebuyers, especially Millennials, haven't fully investigated their home financing options because they are pessimistic about qualifying for a mortgage. Our Homeownership Program Index highlights the wide range and availability of down payment programs available to today's homebuyers. In fact, 91 percent of the 2,290 programs in our registry have funds available to lend to eligible buyers. Plus, income limits vary depending on the market and programs extend beyond just first-time homebuyers," said Rob Chrane, president and CEO of Down Payment Resource. "It's important for buyers to research down payment programs as part of their loan shopping process."

"Historically low homeownership rates across nearly every age demographic have led to a public policy push to lower the barrier to homeownership through down payments as low as 3 percent, but the fact is that the barrier to homeownership is often much lower than even that 3 percent for borrowers who take advantage of one of the myriad down payment help programs available across the country," said Daren Blomquist, vice president at RealtyTrac. "Prospective buyers -- or their agents -- willing to put in a few minutes of time to find out what programs are available to them will put themselves in a much better position to successfully purchase a home."

10 counties with most homes qualifying for down payment help
Among the 10 U.S. counties with the most homes qualifying for down payment help, Wayne County, Mich., in the Detroit metro area had the highest percentage of homes qualifying at 94.37 percent, followed by Dallas County and Harris County (Houston) in Texas, both with nearly 93 percent of homes qualifying, and Clark County, Nev., in the Las Vegas metro area with more than 92 percent of homes qualifying.

Among these 10 counties, Los Angeles County had the lowest percentage of homes qualifying for down payment help with just over 78 percent, followed by Miami-Dade and Broward counties in Florida with 82 percent and 83 percent of homes qualifying respectively.

"Post downturn generations are typically more frugal, and today's homebuyers accordingly have lower backend debt-to-income ratios and subsequently more buying power than the last generation, but most have little money for down payments," said Mark Hughes, Chief Operating Officer at First Team Real Estate, covering the Southern California market. "More than half the interested buyers in our agents' pipelines are more concerned with pulling together today's required down payment than meeting the income-to-debt ratio requirements. 

"Down payment assistance tends to suffer from lack of awareness," Hughes continued. "Guidelines and specifics tend to change with economic swings. Agents typically don't keep up with the changing requirements and many buyers that depend on their guidance may be unaware of the opportunities. At First Team we have updated lending opportunities and requirements circulated weekly to keep our buyers apprised of the opportunities available."

 
 
10 U.S. Counties with Most Homes Qualifying for Down Payment Help
State   County   Total Single Family Homes & Condos in County   Total that Qualify for Down Payment Assistance   Pct that Qualify
CA   Los Angeles   1,762,256   1,377,813   78.18%
IL   Cook   1,372,463   1,163,913   84.80%
AZ   Maricopa   1,227,121   1,052,746   85.79%
TX   Harris   1,038,027   961,957   92.67%
MI   Wayne   692,174   653,221   94.37%
CA   San Diego   717,165   618,050   86.18%
FL   Miami-Dade   716,924   589,683   82.25%
NV   Clark   605,679   558,411   92.20%
TX   Dallas   574,849   533,518   92.81%
FL   Broward   623,634   523,178   83.89%
                 

20 counties with highest percentage of homes qualifying for down payment help
Among counties with a population of at least 100,000, those with the highest percentage of homes qualifying for down payment assistance were counties in Mississippi, California, Illinois, Pennsylvania, Maryland, New York, Texas, Ohio and Delaware.

"While lessening down payment amounts may be welcomed by consumers, few will realize the benefits due to the added complications, delays, and restrictions added within the loan process of such opportunities," said Michael Mahon, executive vice president at HER Realtors, covering the Ohio housing markets of Cincinnati, Dayton and Columbus. "For example, lowering the down payment amounts out of pocket for a consumer does little to help their plight when they are required to maintain documented cash reserves in the amount of six to 12 months for qualification for certain lending programs."

 
 
20 Counties with Highest Percentage of Homes Qualifying for Down Payment Help
(Population 100,000 or more)
State   County   Total Single Family Homes & Condos in County Total that Qualify for Down Payment Assistance   Pct that Qualify
MS   DeSoto   48,249 48,196   99.89%
CA   Imperial   29,353 29,308   99.85%
IL   DeKalb   26,155 26,104   99.81%
PA   Cambria   22,514 22,444   99.69%
IL   Winnebago   86,116 85,848   99.69%
PA   Fayette   35,039 34,915   99.65%
MD   Charles   46,512 46,323   99.59%
CA   Kings   25,832 25,711   99.53%
PA   Blair   40,778 40,584   99.52%
NY   Oswego   28,768 28,631   99.52%
IL   Rock Island   51,294 51,041   99.51%
MS   Jackson   43,361 43,138   99.49%
TX   Kaufman   29,676 29,521   99.48%
CA   San Joaquin   155,382 154,497   99.43%
OH   Ashtabula   28,696 28,531   99.43%
MS   Hinds   72,831 72,410   99.42%
CA   Fresno   197,660 196,477   99.40%
CA   Stanislaus   121,040 120,313   99.40%
DE   Kent   27,069 26,893   99.35%
MS   Rankin   40,501 40,235   99.34%
               

20 counties with lowest percentage of homes qualifying for down payment help
Among counties with a population of at least 100,000, those with the lowest percentage of homes qualifying for down payment assistance were led by New York County (Manhattan), N.Y. with just 28.84 percent and San Francisco County, Calif., with 33 percent. Other states represented were South Carolina, Georgia, Maryland, Alaska, Michigan, Colorado, North Carolina, Maine, Vermont, Minnesota, Massachusetts and Virginia.

"In our market the greatest obstacle for buyer's getting into the market is competition and lack of inventory. In many cases FHA and low money down buyers are getting beat out in multi-offer situations by buyers with at least 20 percent down and cash buyers," said Greg Smith, owner/broker at RE/MAX Alliance, covering the Denver market. "Overall I think the new low down programs will help long-term, but may take time to have any real impact."

 
 
20 Counties with Lowest Percentage of Homes Qualifying for Down Payment Help
(Population 100,000 or more)
State   County   Total Single Family Homes & Condos in County   Total that Qualify for Down Payment Assistance   Pct that Qualify
NY   New York   109,273   31,514   28.84%
CA   San Francisco   140,597   46,409   33.01%
CA   Marin   69,624   24,257   34.84%
CA   San Mateo   178,794   65,027   36.37%
CA   Santa Clara   408,483   175,459   42.95%
SC   Beaufort   66,162   33,240   50.24%
GA   Forsyth   58,368   29,489   50.52%
MD   Howard   91,171   49,555   54.35%
AK   Anchorage   71,254   42,276   59.33%
MI   Washtenaw   98,775   58,904   59.63%
SC   Charleston   116,987   70,246   60.05%
CO   Boulder   94,403   57,013   60.39%
NC   Brunswick   52,642   32,838   62.38%
ME   York   57,823   36,532   63.18%
VT   Chittenden   43,701   27,629   63.22%
NC   Wake   278,794   178,220   63.93%
MN   Washington   80,480   51,658   64.19%
MA   Middlesex   367,137   236,500   64.42%
VA   Arlington   56,033   36,113   64.45%
WA   King   581,919   375,638   64.55%
                 

Down Payment Help Facts
Following are key facts based on analysis of Down Payment Resource's Homeownership Index of the 2,290 Down Payment Help programs nationwide:

  • Approximately 91 percent of programs have funds available now for homebuyers.
  • The average amount of down payment assistance across all counties is $11,565.
  • At least one down payment program is available in all 3,143 U.S. counties, and more than 2,000 counties have more than 10 down payment programs available to prospective homebuyers.
  • More than half of the down payment programs (54 percent) are Community Seconds, where a second mortgage is issued by a Housing Financing Agency (HFA) or nonprofit organization with a very low or no interest rate. The payment on the second mortgage may be deferred or forgiven incrementally for each year the buyer remains in the home. In a typical scenario this could reduce the amount of cash needed to close from $20,000 to $200.
  • Other major program types:
    • First mortgage loans with below-market interest rates or 100 percent financing.
    • Mortgage Credit Certificates (MCCs) that provide up to $2,000 in annual tax credits for the life of the loan.
    • Neighborhood Stabilization Program (NSP) loans and grants designed to revitalize communities that have suffered from foreclosures, high unemployment and other concerns slowing housing recovery.
  • Many of these programs can be layered with each other and can often be used with most loan products, including VA and FHA home loans.
  • 24 percent of programs are available state-wide, not specific to a county or neighborhood.
  • The South leads the nation in the total number of available homebuyer programs, followed by the West.
  • The states with the greatest number of down payment programs are California, Florida, Texas, Maryland, New York, Georgia, Pennsylvania, Massachusetts, Illinois and Colorado.

About RealtyTrac
RealtyTrac is a leading supplier of U.S. real estate data, with nationwide parcel-level records for more than 129 million U.S. parcels that include property characteristics, tax assessor data, sales and mortgage deed records, Automated Valuation Models (AVMs) and 20 million active and historical default, foreclosure auction and bank-owned properties. RealtyTrac's housing data and foreclosure reports are relied on by the Federal Reserve, U.S. Treasury Department, HUD, numerous state housing and banking departments, investment funds as well as millions of real estate professionals and consumers, to help evaluate housing trends and make informed decisions about real estate.

About Down Payment Resource's Homeownership Program Index
The Homeownership Program Index (HPI) measures the availability and characteristics of down payment programs administered by state and local Housing Finance Agencies (HFAs), nonprofits and other housing organizations. It analyzed state, local and national programs available in the DOWN PAYMENT RESOURCE™ registry as of January 14, 2015.