Down payment help, and what the strings are

Most down payment assistance is not a gift. It is money lent to you and recorded against the house alongside your mortgage. Some of it is written off if you stay long enough. Some of it comes due the day you sell. The word “assistance” covers all of it, and tells you which kind you have: nothing.

• Forgivable over time

  You owe it, but the balance is written off gradually for as long as you keep living there. Leave early and some of it comes back.

• Deferred

  You owe all of it, but nothing is due yet. It comes due when you sell, refinance, or pay the mortgage off.

• A repayable second lien

  A second loan with its own payment, starting straight away. Two loans to service rather than one.

• A true grant

  No repayment and no conditions. These exist, and they are the rarest of the four. The word gets used loosely for the other three all the time.

Before you accept any of it, get a plain answer to one question: under what circumstances do I pay this back? Anybody offering you help who cannot answer that clearly is not helping you.

Almost every form of this is built on you staying put. That is the actual deal — the help is real, and the condition attached to it is time.

So the thing to work out before you sign is not whether you qualify. It is what happens if life moves you sooner than you planned. A job, a baby, a divorce, a parent who needs you nearer. None of that is on a term sheet, and all of it is more likely than people assume when they are excited about a house.

This is not a reason to avoid assistance. It is a reason to know which kind you are taking. Taking the forgivable one and staying is a good outcome. Taking it and moving two years later is a bill arriving at the worst possible moment.

The expensive mistake here is not picking the wrong program. It is assuming none of it applies to you and never asking.

• “First-time buyer” is a technical term, not a plain-English one. It commonly means you have not owned the home you lived in for the last three years — so people who owned one years ago often still count. Programs define it differently, so it is worth checking rather than assuming.
• Plenty of assistance is not limited to first-time buyers at all.
• Help comes from more places than the state. Counties, cities, employers, unions and nonprofits all run their own.
• Some of it attaches to the house rather than to you — where it is, not who you are.

People rule themselves out of this constantly, usually on something they half-remember hearing. Asking costs nothing and pulls no credit.

You would expect one here. Here is why there isn't one.

These programs are run by state agencies, counties, cities, employers and nonprofits, and they are not stable. Money runs out partway through a month. Rules change. Programs close and reopen on different terms.

Any list I publish is out of date by the time you read it, and an out-of-date list of help is worse than no list at all, because people make plans around it. The honest version is to find out what is open and what you fit at the moment you are actually buying — which is never the moment somebody sits down to write an article.

It is also why I would be careful with any site showing you a tidy table of programs and amounts. Check the date on it. Then check whether the programs on it still exist.