Many home loan programs have been specifically created for first time home buyers. These loans feature low down payments and approval guidelines that make it easier to qualify. First time home buyer programs are available to those who have not owned a home for the past three years. Generally, first time home buyers are also eligible for the traditional conventional and government mortgages too. Some of the more popular first-time homebuyer programs are listed below.
FHA & VA LOANS FOR FIRST TIME BUYERS
First-time homebuyers often experience the most difficulty amounting a significant down payment and everyone should have the opportunity to buy a home. For this reason, the Federal government has developed two loan excellent programs to assist homebuyers that have a little or no down payment. These programs are called the Federal Housing Administration (FHA) and the Veteran’s Administration (VA). These programs are not solely intended for first-time home buyers; your home loan advisor will be able to determine if you qualify and if so which program is acceptable for your needs.
3% DOWN CONVENTIONAL HOME BUYER PROGRAMS
New first-time homebuyer programs reduce the down payment the borrower must pay to 3%, which can be the borrower’s own funds or a gift from a family member. The closing costs can be gift funds, a grant, or seller assistance up to 3% of sale price. First Rate may also issue a credit to cover some or all of the closing costs. This type of home loan usually requires the homebuyer to take a class on home ownership in their state. Upon completion of the class, the homebuyer will receive a certificate as proof of completion. Many of these programs have income limits which may disqualify you from the program.
DOWN PAYMENT ASSISTANCE PROGRAMS
Purchasing a home is a goal shared by many people but it can be difficult for some to collect the funds needed for a down payment. Fortunately, there are many programs to assist those who need help with down payments. There are national assistance programs and programs specifically for residents of your state. The precise requirements of the individual programs will need to be discussed with your mortgage broker but many assistance programs do not require repayment of the gift. First Rate Lending is constantly adding new down payment assistance programs, however, in our experience more often than not the additional costs, rate increase, and strict requirements often greatly reduce the appeal of down payment assistance.