Solano Real Estate Scene: Zero down is back

A downpayment is no longer the biggest challenge for middle class buyers in Solano County. The income limit for a first-time buyer to qualify for downpayment assistance and purchase a house with little or even nothing out of pocket is now $163,000 per year, which is nearly doubled what it was last year. Many first-time homebuyers over the years made too much income to qualify for city- or state-funded downpayment assistance, so coming up with 3 percent to 3.5 percent was always the biggest hurdle for folks who had no savings, 401(k) plan or family willing to help with gift funds. There is rarely a free lunch in this world and one thing informed and financially smart buyers do is look before they leap. The monthly house payment and the interest rate on most of these programs is higher than the rate available with 3 percent to 5 percent down, so I suggest to all first-time buyers and their parents that are assisting and advising to review their options with a downpayment before they jump on the other programs. Borrowing from a 401(k) plan or borrowing from Grandpa may be a better short-term and long-term option.