()Erin, a Duke University student in Durham, North Carolina had been contemplating buying her first house. Erin was 32 years old and knew that Durham’s housing market was heating up.

“I figured if I was going to buy a house, I’d better do it sooner rather than later because prices just kept going up,” explains Erin.

But she was only $7,000 short of having enough savings to make a downpayment. She was faced with a dilemma when it came to timing. She had to decide whether she should wait to save money for a house that would likely cost more within a year. Or she could use all of her savings to purchase a house right away, at the risk that she will not have enough money for future expenses or a rainy-day fund.

Erin visited the home of a friend who used a downpayment assistance program to purchase her house. Erin was able to give me the answer. Her friend explained that down payment assistance programs allow first-time homebuyers to save money on down payments. Some programs even cover closing costs.

All eligible borrowers get free money

There are over 2,500 programs for down payment assistance in the United States, but Erin chose to apply for the same program offered by the state that her friend used.

Program called North Carolina 1st home Advantage down paymentThis makes homeownership more affordable and accessible to all state residents. It provides down payment assistance of upto 5 percent for FHA and VA loans, and upto 3 percent for conventional loans. Erin qualified because she had a good credit score and was within the program’s income limits.

Erin received a zero-percent deferred second loan as a down payment. If she doesn’t refinance or sell the house within 15 years, Erin’s down payment assistance is forgiven. She won’t be required to repay it.

Let the house hunting begin!

Erin realized she was eligible for assistance with her downpayment and began her home-search. The 1925-built home had 3 bedrooms and 1 bathroom. The house was purchased at $152,000. She used private mortgage insurance and conventional financing to finance the home. Erin purchased her home with $3.5% down payment assistance ($4.560).

“And, I didn’t have to use all my savings!” says Erin. Due to rising home values, Erin has also built equity over the past two years.

Erin has many benefits beyond the financial rewards of owning a house. “I’ve got so much more space for the money than when I was renting,” says Erin. “And I like being a permanent part of the neighborhood and getting to know my neighbors.”

Visit www.homebuyer.org for additional resources. readynest.com.

You can visit this site to search for down payment assistance programs within your region. downpaymentresource.com/