Inflation is a hot topic right now, thanks to broad increases in prices for everything from food, gas, and home staples that we’re seeing right now. In fact, inflation hit a 31-year high in October, causing all sorts of knock-on effects. Like, to cite just one example, Dollar Tree announcing that almost everything on its shelves will no cost more than $1 going forward, permanently. Almost 80% of Americans say that inflation is affecting them personally at the moment, and 57% blame President Biden. The housing market, as you can imagine, is also not immune to all this. The S&P CoreLogic Case-Shiller Indices reveals that home prices were up 19.8% year-over-year in August. In light of that, here’s one way potential homebuyers can get help with down payment costs and other expenses.
Down payment grant program — Bank of America
Bank of America expands down-payment assistance program for home buyers with moderate incomes https://t.co/0JVoPajygn
— Cheryl Batchelor (@CherylBatchelo3) February 27, 2021
Bank of America is offering two home grant programs aimed at borrowers with modest incomes. The two programs are a home payment program and a down payment program — the former being available in around 800 cities and counties. While the latter is available in over 260 cities and counties. Neither program requires repayment from the borrower, and the bank says it’s helped almost 30,000 people buy homes with these programs.
The down payment program offers a grant equal to 3% of the home purchase price, up to $10,000. Among the important caveats to know here, according to the bank’s website:
- The borrower must purchase a home in certain geographical areas.
- Maximum income and loan amount limits apply.
- And since this is a grant that you don’t have to repay, it might trigger a tax issue. A Form 1099-MISC will be issued, so the bank encourages borrowers to consult with their tax advisor.
The other program here is BofA’s America’s Home Grant program. It offers a credit of up to $7,500, which the bank says can go towards non-recurring closing costs, like title insurance and recording fees, “or to permanently buy down the interest rate.” And these funds don’t have to be repaid, either.
According to a Realtor.com analysis, monthly mortgage payments for a median-priced home are up $160 compared to one year ago.
The BofA programs support the bank’s commitment, announced earlier this year, of $15 billion through 2025 that’s meant to help more than 60,000 individuals and families buy homes.
You might have heard some horror stories about the housing market right now. Involving a frenzy to buy that manifests itself in multiple offers, some offers in cash, investors crowding out individual buyers, and much more. The good news? Redfin is predicting that the frothy, overheated market will simmer down a great deal by the end of next year. Allowing, hopefully, more normal and even first-time homebuyers to get in on the action.
More stimulus checks?
Borrowers would certainly have more money to put towards things like new home costs if President Biden and Democrats get their way.
Next month, the Senate is expected to take final action on legislation that would extend the payment of stimulus checks for one more year. The checks are child tax credit payments that are going out monthly.
Right now, the last of these checks arrives on December 15. The new legislation proposes extending the monthly child tax credit checks for 12 more months. As a result, it’s like that the December 15 payment won’t actually be the last one.