RealtyTrac: Lowcountry lands near bottom in share of homes that would qualify for down payment assistance, yet deals are still out there

About 60 percent of homes in Charleston County would be eligible for down payment assistance, according to a new study by RealtyTrac information service (Provided).

By JIM PARKER

The Post and Courier

First, the up tempo news: three of every five houses in Charleston County would be eligible for programs that help buyers with their down payments.

Now, here’s the downbeat side. The area’s 60.05 percent rate of properties that would qualify for discounted down payments and other assistance ranks ninth lowest out of 1,792 counties nationwide with 100,000 or more people. Shoppers in Beaufort County are even less likely to find homes that would be eligible, placing fifth lowest at 50.24 percent.

The national eligibility average is 87 percent, according to a study by RealtyTrac. The national housing information firm researched Down Payment Resource’s Homeownership Program Index to come up with its findings.

The survey comes as the Obama administration and mortgage titans Fannie Mae and Freddie Mac recently loosened mortgage regulations so that some borrowers could secure home loans with reduced down payments as the percentage of the purchase price.

“Historically low homeownership rates across nearly every age demographic have led to a public policy push to lower the barrier to homeownership through down payments as low as 3 percent,” says Daren Blomquist, vice president at RealtyTrac.

“But the fact is that the barrier to homeownership is often much lower than even that 3 percent for borrowers who take advantage of one of the myriad down payment help programs available across the country,” he says in a report on Marketwired.

“Prospective buyers — or their agents — willing to put in a few minutes of time to find out what programs are available to them will put themselves in a much better position to successfully purchase a home.”

In Charleston County, 70,246 homes out of 116,987 would meet eligibility standards. A total of 33,240 houses in Beaufort County out of 66,162 would qualify.

RealtyTrac says it looked at 2,290 down payment programs via Down Payment Resource’s index and found that more than 68 million out of 78 million single family homes and condos in the U.S. would qualify for a down payment program in the county where they’re located. The figures are based on maximum price requirements for the programs and estimated value of the properties. The study was limited to counties with sufficient home value data.

“Many homebuyers, especially Millennials (those reaching adulthood around the year 2000 or later) haven’t fully investigated their home financing options because they are pessimistic about qualifying for a mortgage,” says Rob Chrane, president and chief executive of Down Payment Resource.

According to the resource’s index, 91 percent of the 2,290 down payment programs have funds available to lend to eligible buyers. Chrane adds that income limits vary by market and assistance programs extend beyond just first-time homebuyers.

“It’s important for buyers to research down payment programs as part of their loan shopping process,” he says.

According to RealtyTrac, the average amount of down payment assistance across all counties is $11,565. The South leads the nation in the total number of available homebuyer programs, followed by the West, the researcher says.

Among the 10 counties with the most homes qualifying for down payment help, Wayne County, Mich., in the Detroit metro area had the highest eligibility percentage at 94.37 percent, followed by Dallas and Harris (Houston) counties at nearly 93 percent, and Clark County, Nev., in the Las Vegas metro area with more than 92 percent .

“Down payment assistance tends to suffer from lack of awareness,” says Mark Hughes, chief operating officer at First Team Real Estate in the Southern California market.

“Guidelines and specifics tend to change with economic swings,” he says. “Agents typically don’t keep up with the changing requirements and many buyers that depend on their guidance may be unaware of the opportunities.”

According to the RealtyTrac examination, DeSoto County in Mississippi leads the nation in the highest percentage of homes qualifying for down payment help at 99.89 percent. At least 20 counties landed above 99 percent eligibility.

“While lessening down payment amounts may be welcomed by consumers, few will realize the benefits due to the added complications, delays, and restrictions added within the loan process of such opportunities,” says Michael Mahon, executive vice president at HER Realtors in the Cincinnati, Dayton and Columbus areas of Ohio.

“For example, lowering the down payment amounts out of pocket for a consumer does little to help their plight when they are required to maintain documented cash reserves in the amount of six to 12 months for qualification for certain lending programs.”

The lowest qualifying percentages are in New York County covering Manhattan at 28.84 percent and San Francisco County at 33 percent.

“In our market the greatest obstacle for buyers getting into the market is competition and lack of inventory,” says Greg Smith, owner/broker at Re/Max Alliance covering the Denver market. “Overall I think the new low down programs will help long-term, but may take time to have any real impact.”

For more information, visit RealtyTrac at www.realtytrac.com.

Reach Jim Parker at 937-5542 or jparker@postandcourier.com.