I live in Southern California where real estate is absolutely insane. I’m hoping to buy a home with my bf in the next 2-3 years after we get married. Unlike most couples who save money when they move in together, we are in a unique situation where moving out of our current places will cost us 4-5x more than what we’re paying now. It will be very hard to save for a home when we’re paying so much in rent after we leave our current places. (He lives at home, so I can’t move in with him, and I live 2 hours away from his job in a rent-controlled apartment, so that’s not an option either.)
A friend of mine told me about this down payment assistance program for teachers, health care workers, and government employees called Landed. It’s supposedly funded by donations and run by Mark Zuckerberg’s wife so I’m hoping it’s not a scam? Basically, you put up 5-10% of the down payment and they cover the rest to bring it up to 20% so you don’t have to pay PMI. There is no interest on the money they put up, but when you sell the house, you pay them back plus share the gain or loss of 2.5% for every 1% they give. (So if they give 10%, they get 25% share in the appreciation). Considering it’s difficult to find a house under $600,000 in my area, this would be a significant help to get us into a home much quicker. It will also keep our monthly payments lower. Assuming we bought a $600,000 house, and they put up $60,000 for our down payment, at 3% interest for 5 years that’s $9,000 we would save in interest. I also can’t see home prices appreciating that much in the next few years after we have been seeing record high prices, so 25% of our appreciation wouldn’t be that much?
It just sounds too good to be true and I’d like to hear more opinions on it. Here’s their website if my explanation doesn’t make sense: https://help.landed.com/what-is-landeds-down-payment-program?_gl=1*5re70l*_ga*MTY3OTU2MjYzNS4xNjMzOTc2MDgx*_ga_6CYWV36ERG*MTYzNDA2MjA0Ni4yLjEuMTYzNDA2Mjc5MS4w