You can now buy a $2,500 house for under $1 million in some places in America.
But that’s not how it works.
And if you live in one of these markets, you’re probably not getting the most bang for your buck.
As Recode’s Dave Lauterbach notes, if you want to get an affordable house, you have to qualify for a low-income housing subsidy.
That means, you must pay for a home with no mortgage, and your income must be at least 125 percent of the federal poverty line.
The government has already set a limit of about $28,000 for that amount.
It’s an incentive to buy a house with a smaller down payment and smaller down payments than the median house price in the U.S., and it’s a key reason why many buyers choose to buy into a real estate investment trust (REIT).
But it also means that you’re more likely to get the house you want than a house that fits the criteria of the minimum down payment.
If you qualify for the housing subsidy, you can save a ton of money.
With the maximum down payment of about 5 percent, a home in your district can fetch $2 million or more.
If you qualify, you’ll get $1.5 million, according to the National Association of REITs.
The minimum down payments for houses under $100,000 are 10 percent.
You can also save money by purchasing a property with an existing mortgage or paying down the balance of your mortgage, which typically has a maximum downpayment of 10 percent of your monthly income.
In some areas, such as California, you may have to pay more upfront to qualify.
To qualify for such a mortgage, you also need to pay a down payment, which is typically 25 percent of what the average house price is.
That means you’re saving money.
And, you don’t need to worry about how much money you’ll actually save by purchasing the property, because you’re getting the tax breaks that come with the mortgage.
While it’s still a great deal for a relatively affordable home, buying into a REIT will cost you a lot more than the typical mortgage, Lautarbach writes.
“A REIT typically costs as much as a conventional home, and if you can get that down payment down to 10 percent, it’s pretty much a free ride,” he writes.