Final answer:
The statement is True; down payment assistance programs offer grants and affordable loans to make homeownership more accessible by reducing upfront costs. However, low down payment options may require additional mortgage insurance, increasing the total cost over time.
Step-by-step explanation:
The statement that down payment assistance programs offer grants and affordable loans to help offset the upfront costs of homeownership is True. These programs are designed to aid potential homeowners who are unable to save the often suggested 20% down payment. For instance, some buyers might qualify for a 0-3.5% down payment through programs like those offered by the Federal Housing Administration (FHA). However, it's important to note that these lower down payment options typically require the buyer to purchase mortgage insurance, an additional cost that protects the lender in the event of a default. This insurance is an extra fee that increases the overall mortgage amount paid over time.
A mortgage is essentially a loan secured by the property being purchased. Traditionally, a down payment of 20% of the home's purchase price is recommended. This serves as an assurance to lenders that the borrower is invested in the property and reduces the risk of loan default. Yet, many individuals seek assistance through various programs, including but not limited to, the FHA, which was established to make homeownership more accessible. This has contributed to a significant increase in homeownership rates over time.