Mortgage Options and Programs for First-Time HomebuyersBy Bill Gassett When you are about to enter the housing market for the first time, the money you are about to spend could be daunting. Many expenses are involved when buying a home, but you might find some payment assistance available. What first-time homebuyers program could you qualify for? You might be surprised at how many programs are designed with first-time buyers in mind. Government programs and charitable assistance could help you financially when purchasing your first property. There are also education programs to make the process less stressful. Government-backed loans If you have poor credit or don’t have the money for a decent down payment, government-backed loans could solve some of these problems. Down payment assistance Saving a down payment isn’t easy when paying rent and other monthly expenses. To make this easier, there are down payment assistance programs that might offer a grant or a low-interest loan to fund the down payment. DPA loans If you don’t have enough money for a down payment, a few loans and assistance programs are available. You could get a second mortgage that you must pay back simultaneously with your main mortgage. DPA grants Grants don’t have to be repaid and can be available through local or state government. Check with them for details of programs you might qualify for. Nonprofit buyer programs Some charities and nonprofits offer help to low or moderate-income buyers. They can provide financial and educational assistance if you meet their income requirements. Good neighbor next door If you are a teacher, EMT, police officer, or firefighter, the Good Neighbor Next Door program could get you a big discount on a home. You might be able to get 50% off certain HUD properties that were foreclosures. HomePath ready buyer Fannie Mae offers this option to buy a foreclosed property. HomePath allows down payments of 3%, and you could get up to 3% of your closing costs back. Employer-sponsored programs Some employers have incentive programs to help their employees with the costs of buying a home. These programs are often joint arrangements with state governments. Check with your HR representative to find out if you could get help with down payments or closing costs. Student grants and loans Getting a mortgage when you have school loans can be difficult. FHA and VA loan programs can be more flexible to allow you to manage both repayments and easier to qualify for. Final thoughts The cost of becoming a first-time buyer need not be as big a problem as it first appears. With many options to help cut costs and make buying your first home more accessible, ownership doesn’t necessarily have to wait for you to save a down payment. |
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