Unlock Homeownership: Zillow Will Cover 2% of Your Down Payment
Navigating today’s turbulent housing market can feel like an uphill battle, especially when you’re trying to save enough for a down payment on your dream home. Amid a nationwide housing crunch, the average rental cost has skyrocketed to an eye-watering $2,062— a 3.6% increase compared to just last year. To add fuel to the fire, since the outbreak of the pandemic in March 2020, rents have surged by an astonishing $457, marking a nearly 28% uptick. With rising living expenses due to inflation, many Americans find themselves stuck in the renter’s loop, unable to allocate enough savings for a home down payment.
The Game-Changing 1% Down Payment Program
Statistics show about 64% of first-time homebuyers are only able to put down less than 20% on their new homes, and a shocking 25% can afford less than 5%. Enter Zillow Home Loans’ revolutionary 1% Down Payment Program, a glimmer of hope specifically designed to make homeownership accessible for Arizona residents. The program’s structure is simple yet impactful: qualified buyers save just 1% of the property’s purchase price while Zillow Home Loans takes care of an additional 2%, making the total down payment a manageable 3%. Although currently limited to Arizona, Zillow has ambitious plans to broaden the program to other markets.
In a statement released on August 24th, Orphe Divounguy, an economist at Zillow Home Loans, outlined the transformative impact of this initiative. “The program is a godsend for those who can manage higher monthly rent payments but find the initial costs of homeownership daunting. Our down payment assistance not only lowers the entry barrier but also converts the dream of owning a home into a tangible reality.”
Making Homeownership More Accessible Than Ever
One of the most exciting facets of Zillow’s 1% Down Payment Program is its potential to dramatically cut down the time required to save for a down payment. According to Zillow’s calculations, prospective homebuyers who only have to stash away 1% could accumulate enough for the down payment in as little as 11 months.
For example, consider a potential buyer interested in a $275,000 property, earning at least 80% of their area’s median income. If this individual sets aside just 5% of their monthly income, it would take under a year to save up the required 1% down payment of $2,750, thanks to Zillow’s contribution.
In contrast, without Zillow’s groundbreaking program, that same buyer would need nearly three years—or precisely 31 months—to collect the traditional 3% down payment of $8,250.
So, whether you’re a first-time buyer or someone eager to re-enter the homeownership game, Zillow’s 1% Down Payment Program might just be the financial boost you need to make your homeownership dreams come true, and in record time!