Colorado Springs Vintage Homes Blog
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How do I get a down payment for Homes in Colorado Springs?
Colorado Springs Vintage Homes is happy to feature a great article by
Harry Venik with Adams Mortgage, LLC in Colorado Springs
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Colorado Springs Home Buyer’s Down Payment FAQs
With today’s combination of lower home prices, some of the lowest interest rates the industry has ever offered, and 
the $8000 tax incentive for first-time buyers, buying a home in Colorado Springs has never been so attractive. The only real hurdle left for many Americans is coming up with a down payment. With this in mind, we’ve put together some of the most frequently asked questions we get about down payments in today’s market.
Q. Are there any no-down payment programs left?
Yes. While it’s true that most of the popular no-down payment programs disappeared in the wake of the subprime mortgage collapse, there are still two longstanding government-backed programs that offer mortgages with no down payment: the USDA Rural Development Program and the VA Loan Program.
A USDA Guaranteed Loan is a government-insured, 100% purchase loan. This means there is no down payment required if you – and the house you intend to buy – qualify for the program. Not all areas qualify, but you’d be surprised at how many neighborhoods in your area do. There are income and other limitations, but if coming up with a down payment is challenging, you might want to consider this program.
If you or your spouse is a military veteran, you may qualify for a 100% financed loan from the US Department of Veterans Affairs. More than 29 million veterans and service personnel qualify for this service benefit.
Q. Are there any other government-insured programs that can help someone struggling with a down payment?
Yes. In 1965, the federal government created the FHA loan programs to encourage homeownership throughout the country. FHA insured mortgages offer many benefits, including a minimum down payment of 3.5%. FHA insured loans have grown in popularity recently due to the seller’s ability to pay closing costs up to 6% and a temporary increase in loan limits up to $729,750 in certain high-cost areas, which allows more potential buyers to utilize this program.
Q. May I use a gift from family members as part of my down payment?
Yes. In many cases, immediate family can provide monetary gifts to be used as a down payment. There are restrictions of course, and strict documentation will be required.
Q. May I use funds from my IRA for my down payment?
Yes. First-time home buyers can use funds from an IRA under certain circumstances for a down payment. The rules regarding this option, however, can be complicated, especially with a Roth IRA, and it’s important to understand any and all tax implications before tapping into these accounts. Please talk to your tax professional before making any decisions.
Q. May I use the $8,000 tax credit as my down payment?
No. At the time of the writing of this article, qualified first-time home buyers do not have direct access to the $8,000 credit to use as a down payment. In May, HUD officials made an announcement to the contrary, but statements backing the announcement were quickly withdrawn from the HUD website. This doesn’t mean that HUD and lawmakers will not allow this in the future.
Submitted by Harry Venik
Have a question? Contact Harry at 719-338-3897 or 719-955-3674
For more information on mortgage loans and buying Real Estate in Colorado Springs,
contact Kathy at 719-287-1049
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