There are a few different types of First Time Homebuyers programs, but they all have one common goal: to help people buy their first home. Here are some of the most popular ones:
The Federal Housing Administration (FHA) offers a program called the FHA loan. This program is for people who may not have enough money for a down payment, which is usually 5-20%.
In this program you may not have to worry about making a large minimum down payment. The FHA will insure the loan so the lender can offer less money down. The FHA will also let you finance closing costs and other fees into your mortgage too in some cases. You’ll still need to meet the normal credit, income, and employment guidelines for this type of loan, however these requirements are more relaxed than traditional conventional loans.
Lenders also offer programs specifically designed to help first time homebuyers find an affordable home. These programs usually require only a small down payment (often 3.5%). They may even give you special incentives like paying your closing costs or part of your upfront mortgage insurance.
The Federal Housing Authority (FHA) also offers programs through the FHA 203(k) Loan program to help first time homebuyers purchase a home and make necessary repairs at the same time.
For example, if you want to buy a house that needs some work done, you can get a loan for the purchase price plus the estimated cost of repairs. This way, you don’t have to worry about coming up with two payments at the same time.
You may be able to get a more affordable interest rate on your mortgage through these programs, and you can often finance the costs of repairs into your loan amount.
Another big help for first time homebuyers is the First-Time Homebuyer Credit. This credit was a part of the American Recovery and Reinvestment Act of 2009, also known as the stimulus package. It allows people who have never owned a house before to deduct 10% of their home purchase from their taxes in certain cases.
This credit can be a big help if you’re buying a home in the current market. Because prices have gone down in many areas, you may be able to get a house for less than the amount of the credit. And since the credit is worth up to $8,000, it could really reduce your overall costs.
Contact me today to learn more about these programs and which may help you best find that first home.
We put together a full article & podcast episode on down payment assistance programs.
In the article, we discuss:
- The different types of down payment assistance programs and how they work
- The various requirements needed to be considered for these programs, such as income, credit score, and residency restrictions
- The upsides and downsides of using down payment assistance programs, including the impact on your buying power and potential disadvantages in a competitive seller’s market
- Tips on how to find and apply for these programs in your local area