Buying a home, especially if it is your first home, can seem daunting financially. Luckily, there are nationwide and area-specific programs in place that make it easier for qualifying buyers to get the loans they need without breaking the bank. Many options are designed to get new buyers into the market, so they help first time buyers get a good mortgage or financial assistance through lower down payments, interest rates, and more.
FHA – The Federal Housing Administration offers loans to first time buyers, and offers lenders a layer of protection so they won’t experience a loss if you default on your mortgage. An FHA loan comes with competitive interest rates, smaller down payments, and lower closing costs than conventional loans. Additionally, if you have a credit score of 580 or higher you could be eligible for down payments as low as 3.5%.
USDA – Live in a rural area? You may want to look into a homebuyer assistance program from the USDA. This program guarantees a home loan, and with some there is no down payment required or no requirement to pay for private mortgage insurance. There is also no minimum credit score needed, although it is worthy to note that these loans are geographically restricted. You do not need to own or work on a farm to qualify, but you do need to be in a rural area that supports the program.
Good Neighbor Next Door – This program is supported by HUD and provides housing aid to law enforcement employees, first responders, and teachers. Through the program, you can receive a discount of up to 50% on a home’s listed price in their “revitalization areas.” To find out if a property you are interested in is in one of these areas, you can visit their website.
Energy Efficient Mortgage – These programs vary by location, but all of them encourage environmental efficiency by making it easier for you to add “green” components or improvements to your home. Essentially the cost of the improvements will get rolled into your initial loan, so that the cost does not add onto existing debt or come out of your own pocket.
Whether you are a first-time buyer, or you are just looking to see if you qualify for a level of assistance for your next home, it is worth doing the research to see what kind of programs are out there. This is only a small sampling of a big list of options, so make sure to look into your specific area or even ask your agent if they are aware of any programs before you make the leap into buying a home.