Inflation is a hot topic right now, thanks to the wide-ranging price hikes for everything from food, gas, and household items we’re seeing right now. In fact, inflation hit its 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 the shelves will permanently cost no more than $1. Nearly 80% of Americans say inflation is affecting them personally right now, and 57% blame President Biden. Also, as you can imagine, the housing market is not immune to all this. The S&P CoreLogic Case-Shiller indices show that house prices rose 19.8% year-on-year in August. In light of that, this is one way potential homebuyers can get help with down payments and other expenses.
Deposit Program — Bank of America
Bank of America Expands Down Payment Program for Moderate Income Home Buyers https://t.co/0JVoPajygn
— Cheryl Batchelor (@CherylBatchelo3) February 27, 2021
Bank of America offers two housing benefit programs aimed at low-income borrowers. The two programs are a pay-at-home program and a deposit program, both of which are available in approximately 260 cities and counties. Neither program requires borrower repayment, and the bank says it has helped nearly 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. One of the important caveats to know here, according to the bank’s website:
- The borrower must buy a house in certain geographic areas.
- Maximum income and loan amounts apply.
- And since this is a subsidy that you don’t have to pay back, it can create a tax problem. A Form 1099-MISC is issued, so the bank encourages borrowers to consult their tax advisor.
The other program here is BofA’s America’s Home Grant program. It offers up to $7,500 credit, which the bank says can go toward one-time closing costs, such as property insurance and withdrawal fees, “or to buy off the interest on a permanent basis.” And these funds do not have to be repaid.
According to an analysis by Realtor.com, monthly mortgage payments for a home with an average price are up $160 compared to a year ago.
The BofA programs support the bank’s $15 billion commitment through 2025, announced earlier this year, to help more than 60,000 individuals and families buy homes.
You may have heard some horror stories about the housing market right now. Involving a buying appetite that manifests itself in multiple offers, some cash offers, investors crowding out individual buyers and much more. The good news? Redfin predicts that the frothy, overheated market will simmer strongly towards the end of next year. So hopefully more normal and even novice home buyers can join the action.
More stimulus checks?
Borrowers would certainly have more money to spend on things like the cost of new homes if President Biden and the Democrats get their way.
Next month, the Senate is expected to take final action against legislation that would extend the payment of incentive checks by one year. The checks are child tax credit payments that go out monthly.
Currently, the last of these checks arrives on December 15. The new legislation proposes extending monthly child tax credit checks for another 12 months. As a result, it’s as if the December 15th payment won’t actually be the last.