Down Payment Assistance Programs: What They Are and How They Work
down payment assistance, home buyer, homeownership
Manage Your Debt - Let's Explore Your Options
GET STARTED NOWAFS has launched a credit building program called Save2Build. The goal is to support people with a safe, low-cost credit building option. We know that information in our credit reports is used by numerous institutions such as tenant screening companies, utility companies, employers, and of course credit based services, too.
We also know that people need options to establish and rebuild their credit and things like secured credit cards, while wonderful products, are not available to everyone. So when we were approached to take part in this program, we jumped at the chance. We have partnered with the organization Justine Peterson to provide this program. The program works in conjunction with the financial counseling services we provide and combines goal setting, credit building, and financial counseling. So let’s take a look.
Under Save2Build, the borrowed funds are not distributed directly to you as they would with a traditional loan. Instead, they secure the loan and are deposited into a locked savings account. You make 12, small monthly installment payments over a year. Each monthly payment made toward the loan is reported to the credit reporting agencies which will reflect positively on a credit report and may raise a credit score. At the end of the loan term, the funds are returned to the you from the locked savings account, providing an instant savings cushion that the you can use to continue to build credit or savings over time.
Justine PETERSEN is a not-for-profit corporation based in Missouri and they also founded a Community Development Financial Institution (CDFI) - Great Rivers Community Capital (GRCC). Great Rivers Community Capital funds the loans for this program.
There are few situations where this program is beneficial for people. These include:
And finally, this is a program for people who have credit scores of roughly 600 – 580 or less. People with scores over this amount do not typically see enough of an improvement to benefit from the additional payment history.
One thing to note - It will take a minimum of 6 on time payments before a FICO credit score is generated. An increased credit score is not guaranteed.
For a full program description, including loan costs, view the Save2Build Flyer.
Browse our recent blog articles and you will see and learn about the various ways AFS can help you, as well as educate yourself.
down payment assistance, home buyer, homeownership
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and your counselor will review your credit report, analyze your financial situation and help you find the option that's best for you.