The importance of down payment assistance has been highlighted in a new nationwide survey.
CBC Mortgage Agency conducted its poll over the summer of 2019 to determine the impacts of DPA and found that more than 9 out of 10 homebuyers who used its Chenoa Fund program would not have become homeowners without down payment help.
The poll revealed that more than half of buyers were racial or ethnic minorities and more than a third of borrowers who received DPA were the first in their family to buy a home.
"We conducted this study to illuminate the importance of DPA to lenders and borrowers across the country, and the findings are compelling," said CBCMA President Richard Ferguson. "It's clear that without DPA, millions of Americans would be shut out of the homebuying market. With it, creditworthy buyers and their families can reap the many benefits of homeownership, which creates healthier communities and other positive outcomes for our nation."
Among the 1,100 borrowers surveyed, availability of DPA affected their lives in multiple ways.
Nearly half of all buyers said that saving for a down payment had been the principal reason they had delayed a house purchase and a significant portion of respondents said that for single parents, DPA is the only vehicle that makes homebuying possible.
More than nine out of ten borrowers who used DPA to obtain a loan said they considered their mortgage "affordable."
Student loan debt
Among the 735 lenders that were also surveyed, respondents called DPA particularly helpful for buyers carrying student loan debt. They also said many of their clients had been paying more in rent than the cost of their new monthly mortgage.
"Studies show that homeownership not only helps families build wealth and financial security, but also creates a sense of stability and control that enhances quality of life," Ferguson said. "Nearly nine out of ten renters say they hope to buy a home someday. With DPA, we can help more Americans make that dream a reality."
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