01/14/2024
Did you know there are many options for first time buyers to find the perfect home loan?
First-Time Homebuyer Programs:
Good Neighbor Next Door: This HUD program offers housing assistance for law enforcement officers, firefighters, emergency medical technicians, and K-12 teachers who want to purchase property in a revitalization area. If they qualify, buyers in these professions may receive a 50% discount on the home's purchase price with a minimum down payment of $100 for an FHA loan. Otherwise, the minimum down payment requirement is 3.5%.
FHA Section 203(k): This program allows the borrower of a "needs some work" property to borrow based on the home's value as improved, then use the extra proceeds (the amount between sales price and loan price) to rehabilitate the home. The good news here is that, in contrast to a straight FHA loan, the down payment requirement is 3%, not 3.5%.
Neighborhood Assistance Corporation of America (NACA): No down payment, no closing costs, low fixed rates, and credit score is irrelevant. What must a buyer do to get in on this deal? Attend an “Achieve the Dream” homebuyers workshop as the first step in the qualification process. NACA is a HUD-certified, affordable homeownership advocacy and nonprofit group. NACA works with low- to moderate-income individuals and families, and first-time homebuyers are eligible for the program. Buyers must occupy the home for the term of the NACA loan, along with other program and participation requirements. The process can take up to a year.
Piggyback loans: This is an 80/10/10 loan, where the borrower obtains an 80% first mortgage and a 10% second mortgage, with 10% down. This loan’s advantage is that the buyer can avoid paying PMI. The 80% portion of the loan is usually a 30-year fixed-rate mortgage, and the 10% second mortgage is a home equity line of credit. A condo alternative is a 75/15/10 (interest rates are higher for condominium loans if the first mortgage exceeds 75%). Another advantage of the piggyback loan is that borrowers may be able to pay off the second mortgage without having to refinance the entire loan, reducing their monthly housing payments.
HomeReady: This is a Fannie Mae loan program for first-time homebuyers and repeat buyers. It features a 3% down payment option (which can come from a gift or down payment assistance program), the ability to use the income from a non-occupant co-borrower or non-borrowing household member, or room rental income (30% of qualifying income if criteria are met), and rental income from a basement apartment or mother-in-law suite to qualify.
Home Possible: This is a Freddie Mac loan program that offers loan options with 3% and 5% down. The program also offers down payment assistance, and has the rental income as qualifying income possibility, similar to the HomeReady program.
For more information click here!
https://www.bankrate.com/mortgages/first-time-homebuyer-loans-and-programs/
https://downpaymentresource.com/homebuyers/
Find the down payment assistance you need to get started on your path to homeownership. We’ll provide you with the information you need to take the first step.
