A young couple searches online for ways to make homebuying more affordable

How to Make Homebuying Affordable

August 15, 2024

There are many ways you can make buying a house more affordable, from temporary interest rate buydowns to down payment assistance and more.

A home is one of the biggest investments you’ll make in your lifetime — but that doesn’t mean it can’t be affordable. There are a variety of things you can do to save on costs and make it easier to dive into homeownership.

No-Down-Payment Mortgage Programs

One way to save on your mortgage upfront is to take advantage of a no-down-payment home loan. Waterstone Mortgage offers a variety of mortgage programs that don’t require a down payment, including:

  • Powerhouse 100 — No down payment required, no income limits, and no first-time homebuyer requirement
  • VA Loan — No down payment required for veterans, active-duty military members, and some surviving spouses
  • USDA Loan — No down payment required for homebuyers in rural and some suburban areas
  • Wealth Building Loan — Applies more of your payment to principal and less to interest each month

Down Payment Assistance

You can also use a state or national down payment assistance (DPA) program to save on your new home upfront.

Most states offer DPA programs that provide anywhere from 3-10% in assistance, which homebuyers can use for the down payment and/or closing costs.

Or, you may consider a national DPA program, such as:

Temporary Interest Rate Buydown

The interest rate you lock in will impact your monthly mortgage payment. Did you know you could temporarily reduce your interest rate for the first 1-3 years of your loan?

Temporary buydowns are typically offered in a 3-2-1, 2-1, or 1-0 format.

Here’s how it works (for a 3-2-1 buydown):

  • Year 1: 3% reduction in interest rate
  • Year 2: 2% reduction in interest rate
  • Year 3: 1% reduction in interest rate
  • Year 4: Interest rate returns to the original, locked-in rate

The same pattern applies for a 2-1 (reduced by 2% in year one, then 1% in year two) and 1-0 (reduced by 1% in year one) buydowns.

The seller often covers the cost of a temporary buydown, but Waterstone Mortgage also offers a lender-paid* 1-0 buydown option.


Ready to start your journey to affordable homeownership? Find a loan originator in your area today.


*Lender-paid temporary buydown financing option is only available for a primary residence, purchase transactions. Available with conventional, FHA, USDA, and VA loans — ask your mortgage professional for more details. Lender-paid temporary buydown available on loans locked on or after 5/6/24.