Home buyer assistance programs are special mortgage programs available in the market to offset home affordability challenges.

54 new programs were added in the third quarter of 2023, according to Down Payment Resource (DPR), a home buyer assistance program data and solutions firm. This brings the total number of available programs in the country to 2,256.

13% of the available home buyer assistance programs allow borrowers to lower their interest rates by paying an upfront fee, (points), according to DPR’s home ownership program index report.

Most lenders have been working feverishly to develop programs that meet the needs of their markets. Because of this, many programs now allow funds to be used for rate buy-downs and other financing strategies. 253 will fund permanent rate buy-downs, and 66 fund temporary rate buy-downs. This lowers the buyer’s recurring monthly principal and interest payments to help make home ownership more affordable in a market that has seen interest rates surge.

In a permanent buy-down, borrowers’ interest rate is lowered by a certain percentage for the entire duration of the mortgage. A temporary rate buy-down on a mortgage allows home buyers to reduce their interest rate for a limited period, usually a year or two.

Many programs assist with funding types of upfront loan fees. These include mortgage insurance premiums on FHA loans, and conventional loans with a down payment of less than 20% of the home purchase price.

California offers 325 home buyer assistance programs, the largest in the country. These programs cover a range from temporary and permanent rate buy-downs, to closing cost assistance.

If you are interested in learning more about available programs, we recommend that you consult with a trusted mortgage advisor.