We all know the down payment assistance homebuyer: Low- to moderate-income. No money saved. No cash for a down payment. Marginal credit. First-time homebuyer. Simple, right? Or is it?

Any market growing as fast as this one deserves a second look. As with most niche audiences, down payment assistance buyers are more varied than would appear at first glance. Yes, many are low- to moderate-income buyers, but a growing number are not. And would it surprise you to know that some down payment assistance buyers have money in the bank? Furthermore, some are on their second, or even third home. And many have earned an excellent credit record.

Real estate professionals who understand down payment assistance buyers can tap into a valuable source of new and repeat business. So how do you find these buyers? The traditional method of defining the market and then developing an appropriate strategy may not work in the case of down payment gift recipients. Instead of letting the market define the strategy, try using the strategy to define the market.

In this case, the strategy is the down payment assistance program, and the market consists of those buyers who could benefit from down payment gifts. So, ask yourself: Which buyers will benefit from down payment assistance? The answer to that question will highlight the market you need to target. Let’s consider some situations in which buyers could benefit from a down payment gift.

• Buyers with no cash at all

  The down payment presents the biggest obstacle for most homebuyers. Naturally, some buyers in this situation are low- to moderate-income buyers; however, there are many other possible scenarios. Among the possibilities are young couples who would prefer building equity in a home to making monthly rent payments; newly single individuals with no credit history; and renters who have exhausted their savings paying hospital bills. Of course, cash-poor buyers must have a decent credit history and a steady income in order to qualify for a loan. However, if they can jump those hurdles, they represent an enormous opportunity for the real estate professional.

• Buyers with some savings

  Not every down payment gift recipient has zero savings. Some have managed to accumulate some savings, but for various reasons, they could benefit from down payment assistance. For example, the family who is looking at a fixer-upper might be better off using their savings to pay for repairs and home improvements. Then there are the empty nesters that don’t want to deplete their retirement nest egg or young couples struggling to create an emergency fund. Perhaps these folks should retain their savings and use a down payment gift instead of exhausting their savings to come up with the cash for a down payment.

• FHA borrowers

  Since its inception in 1934, the Federal Housing Administration (FHA), now part of the U.S. Department of Housing and Urban Development (HUD,) has helped almost 30 million Americans become homeowners through its Federal Mortgage Program. The FHA doesn’t actually make mortgage loans; it insures loans so that lenders will be covered in the case of a default. As a result, lenders are more willing to make loans to individuals who might otherwise have difficulty qualifying for a mortgage. Homebuyers also have the opportunity to purchase homes that become available through foreclosures on FHA-insured loans.

  In 2001, first-time homeowners received 79.5 percent of FHA-insured loans, and minorities received 34.7 percent. These two groups represent a significant marketing opportunity, and that’s why most down payment assistance providers focus on FHA borrowers. Check to see if the program you are using meets HUD’s requirements for a charitable organization providing gift funds to homebuyers.

• Eligible veterans

  The Veterans Benefits Administration insured over 250,000 loans last year and estimates they will insure between 300,000 and 350,000 loans this year. Veterans can use down payment gifts for closing costs, funding fees, and rate buy-downs on VA-guaranteed loans. Of special interest to real estate professionals--gift funds increase the chances of loan approval when the sale price exceeds the VA limit, which may help some veterans qualify for a home that better suits their needs. Make sure the gift program you are using has VA approval.

• Minority homebuyers

  Studies prepared by Fannie Mae and based on results from Census 2000 reveal that homeownership rates increased for all racial/ethnic groups during the previous decade. The homeownership rates for African Americans increased by 2.9 percent, Hispanics by 3.3 percent, and Asians by 1.0 percent. But don’t assume the marketing opportunities exist only in the traditional gateway cities, such as New York and Los Angeles. Recent Census studies indicate, for example, that Hispanic population growth has slowed in the established Hispanic areas and is now rising faster in cities such as Portland, Atlanta, and Raleigh.

• Female homebuyers

  According to a Harvard University study in 2001, the number of female first-time homebuyers under the age of 45 increased by 65 percent between 1985 and 1999. Furthermore, Fannie Mae predicts that by 2010, women will own 28 percent of the homes in this country. Several factors have contributed to this trend. First, the number of female-headed households rose from 48 percent in the 1980s to 53 percent in 2000. Second, women have made significant gains in earning power during the last 20 years due to greater access to education. Despite these gains, there are still many female homebuyers with low- to moderate-incomes who need down payment assistance. And don’t forget about single women because they bought twice as many houses in 2001 as single men.

• Manufactured homes buyers. Many buyers who are looking for affordable housing are turning to manufactured homes. Today’s manufactured homes are a far cry from the trailers or mobile homes of the past. They include many of the amenities homebuyers have come to expect in a site-built home, such as fully equipped kitchens, whirlpools, vaulted ceilings, and walk-in closets. It’s not surprising then that a study conducted by Foremost Insurance reveals that 90% of manufactured homeowners are satisfied with their housing choice. Moreover, manufactured homes are eligible for government-sponsored loans offered by FHA and VA.

• New home buyers

  A great many homebuyers are looking to get into a new home, and down payment assistance can help them achieve that goal. The National Association of Home Builders predicts that 2002 will see 1.32 million single-family housing starts, the highest number since 1978. These buyers represent a huge opportunity for real estate professionals, and the market will expand still further if you get builders on board. Find out whether the down payment assistance program you are using offers incentives to encourage builders to participate in their program.

Answering the question of who would benefit from down payment assistance will enable you to tap into the rapidly expanding down payment assistance market. Your answer many vary depending on your locale. But once you have figured out who your buyers are, you can begin helping them become homeowners by introducing them to a good down payment assistance program.

Down payment assistance programs have already made homeownership a reality for thousands of Americans this year. Just think … you could be making dreams come true--simply by identifying and serving down payment assistance homebuyers. Isn’t it time to get started?

Greg Ciliberti is the president of Synergistic Marketing, Inc., national marketers for The AmeriDream Charity, Inc. Learn more about AmeriDream’s down payment assistance program at www.ameridreamcharity.org.