5 Helpful FirstTime Homebuyer Programs

Dated: 10/06/2015

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Owning your own home is about as American as Captain America and Superman – it is part of the American dream. Did you know it is also one of the newer additions to the American dream? Its inception occurred in 1934 when the Federal Housing Administration (FHA) came into existence. Back then, roughly 40 percent of Americans owned a home, and it was tough to go from renter to homeowner. But the FHA breathed new life into the housing market, helping millions of people become first-time homebuyers. Since then, helpful first-time homebuyer programs have thrived.

Buying a house isn’t a fast transaction. It’s a huge challenge for the first-timer because everything from their employment to their credit needs to qualify them for mortgage approval from a lender. Then, there are costs outside of the mortgage to take into consideration, like a down payment, closing costs, insurance, property taxes, and maintenance and repairs. According to Callis and Kresein, as of 2014, 64.4 percent of Americans were homeowners. Although buying a house for the first time is not for the faint of heart, it’s definitely possible.

Purchasing Your First Home with the FHA

If you’re ready to become a homeowner in or around Virginia Beach, taking out a loan via the FHA is one of the easiest ways. As the kick-starter of American homeownership, the FHA has a vested interest in seeing you achieve the dream of owning a home.

You will need at least a small down payment. Depending on your qualifications, it can be as low as 3.5 percent of the home’s purchasing price. The FHA also works to keep the cost of closing low, and closing costs can be folded into the mortgage loan.

FHA loans are federally insured and relatively easy to qualify for. The only downside to the program is the cap on how much you can borrow. The limit varies by location. The home you purchase must also be worth the selling price, otherwise the loan will not be approved. Processing the loan can take longer than a traditional mortgage, but the benefits of an FHA loan make it a sweet deal for first-time homebuyers.

Veterans Affairs Loans

VA loans are a perk offered to individuals who are or have severed in the United States military. These loans are fantastic for first-time homebuyers who are service members and veterans. They offer a great deal of flexibility in the area of income requirements and work in much the same manner as FHA loans.

Local lenders can assist in veteran affairs loans. In case of default, a portion of the loan will be backed by the United Stated Department of Veterans Affairs. As a result, lenders can offer better rates with less stringent qualifications – especially for first-time buyers.

A VA loan is one of the best first-time homebuyer programs out there. If eligible, you won’t even have to front a down payment, which is an enormous perk!

Rural Housing Guaranteed Loans

Do you love the country? Maybe you’re interested in purchasing a home in a rural area. If so, the U.S. Department of Agriculture specializes in rural development loans. For prospective buyers with incomes up to 115 percent of the area’s median income, the Rural Housing Guaranteed Loan is the way to go when purchasing a country home.

In order to qualify, applicants must lack current adequate housing while being capable of paying mortgage payments, property taxes, and insurance. Credit history is also a major approval element.

Rural housing direct loans, also known as Section 502 loans, are made for low-income buyers. These loans allow for the purchase of renovated homes in the country and the option to build. It’s not a bad program to consider if you’re goal is to purchase a rural home.

Habitat for Humanity

The nonprofit Christian housing ministry program known as Habitat for Humanity is a program many first-timers overlook. The program is known for building and repairing homes for families who are unable to obtain conventional financing. Local affiliates of the program often take new home applications and select families who qualify.

If your household income is 30 to 50 percent of the median income in the area, you are a legal resident of the U.S., you receive a regular paycheck that falls within their preset minimum and maximum, and you have had a savings account for a while alongside good credit, you might qualify for your first home through this program. Those selected usually need to make a down payment of $500, attend and complete a homeowner education class, and contribute 300 to 500 work hours on their home or someone else’s.

While Habitat for Humanity is one of the toughest programs to receive approval from, it is a viable option for first-time homebuyers who need help getting their first home. It’s also a great program to get involved with to help the community.

State Specific First-Time Homebuyer Programs

Finally, every first-timer should look into state-specific first-time homebuyer programs. Just about every state runs a series of programs. For example, most states have a program for single mothers or single parents who are trying to buy their first home on a fixed or limited income.

While all programs differ, state funded programs are usually just as helpful as other first-timer programs. They often require a good credit score of at least 640. So your credit house and finances will still need to be in order before applying. And chances are you can never have owned real estate in order to qualify.

Talk to a local real estate agent about your first-time homebuyer program options. They can help point you in the direction of state-specific programs, and they can also help you shop for a home that meets the requirements of any first-time homebuyer loan you qualify for.

First-time homebuyer programs are worth looking into. They can hook you up with better, lower interest rates, fees, and more flexible mortgage payment plans. It’s the best course of action, even better than approaching a lender independently in search of a deal.

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Chenea Powell

Whether it is your first home or the home you plan to retire in, I will be there to ease the process every step of the way! I find great pleasure in helping people achieve their goals in real estate a....

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