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| Don’t Overlook These First Time Home Buyer Programs |
zlaxwin – For most first time home buyers, the process of saving up enough money for a down payment, paying closing costs and moving into your own place can seem daunting. But it doesn’t have to be that way! With the right kind of help, you can get into your first home with very little effort and save some money in the process. Consider these five first time home buyer programs if you want to learn more about how you can buy your first home sooner than later.
FHA – Federal Housing Administration
One of the first time home buyer programs that you should look into is called an FHA loan. An FHA loan gives you access to affordable and fixed-rate mortgages in case your credit history isn’t perfect. All you have to do is find a lender who offers these loans and then take out your conventional home loan through them. Many lenders offer FHA loans, so be sure to shop around for one that will work for you. Remember that if your credit score isn’t as high as it could be, an FHA loan can help make up for it by providing better rates and more flexible terms than other types of mortgage loans might offer.
Another great first time home buyer program is a USDA loan. A USDA loan, or direct rural development loan, is similar to an FHA loan in that it’s a type of government-backed mortgage with good terms and low interest rates, but it’s designed specifically for people who live in rural areas.
If you are eligible for a USDA loan, your payments will be lower than they would be for most other types of mortgages. Another advantage is that you can take out a 15-year or 30-year fixed-rate mortgage through a USDA lender, so your monthly payments will stay level over time instead of fluctuating based on changes to the interest rate.
USDA – United States Department of Agriculture
The United States Department of Agriculture is an agency that provides a variety of assistance and support to farmers and consumers. The Department of Agriculture was established by President Abraham Lincoln’s signing of the Organic Act into law on May 15, 1862. In 2000, Congress broadened USDA’s role to include helping rural communities maintain and improve their quality of life while focusing on business-enabling initiatives that leverage private partnerships and public resources.
One important first time home buyer program offered through HUD is Rural Development (RD). RD programs help low-to-moderate income families purchase affordable homes in rural areas where land values are generally more affordable than those in suburban or urban areas.
USDA Rural Development
Finding a first home that can be yours for little to no money down might sound like an impossible feat, but it’s certainly possible if you qualify for certain government programs. One such program is Rural Development (USDA Rural Development), which offers low-interest loans and down payment grants for eligible homeowners in rural communities. Depending on your circumstances, you may also be able to receive loan forgiveness or zero interest deferred payment loans. To learn more about USDA Rural Development and other first time home buyer programs that could help you achieve your dream of homeownership, read on below!
What Is USDA? The U.S. Department of Agriculture administers several first time home buyer programs aimed at helping people purchase a home even with little cash for a down payment or closing costs as part of its Rural Housing Service division under its rural development initiatives .
Established in 1935 during Franklin D Roosevelt’s presidency as part of his New Deal efforts, today’s agency continues FDR’s work by providing homeownership opportunities to primarily low-to-moderate income families through access to affordable housing and related assistance through HUD’s section 502 Direct Loan Program; Section 515 Guaranteed Loan Program; 503 (Rural Rental Housing); 538 Interest Reduction Payment Program; 530 Multifamily Technical Assistance Grants; 544 Property Disposition; etc.
VA – United States Department of Veterans Affairs
In addition to a mortgage payment, homebuyers purchasing with a VA-backed loan must pay property taxes and insurance. However, most properties will require repairs and upkeep before you move in. The VA offers first time home buyer programs to help cover those expenses. If you qualify for these programs your lender can help you apply for down payment assistance.
The Department of Veterans Affairs also provides grant loans for eligible service members in special circumstances who may otherwise be unable to obtain financing from a traditional lender or government agency. Depending on what type of grant loan you’re eligible for, it could potentially cover 100 percent of your closing costs and other associated expenses when purchasing or refinancing a home.
The VA also provides assistance to disabled veterans who were injured during active military service. If you’re a veteran and have an injury that is not service connected, there are several first time home buyer programs to help you purchase a home. In addition to applying for a VA loan, you may be able to qualify for down payment assistance.
The VA also offers funding for eligible disabled veterans who need mortgage protection insurance or property taxes paid on their homes. If you are planning on purchasing a foreclosed home with a VA-backed loan, it’s important to confirm that it doesn’t have any outstanding liens against it and that there aren’t any unpaid homeowner association fees or other expenses related to foreclosure from previous owners.
City Programs
A good place to start is with your local programs. Many cities and counties offer down payment assistance or grants that help first-time homebuyers pay for their mortgages, closing costs, and more. Some cities even offer homeownership education classes that cover topics like saving for a down payment and what to expect from homeownership. To find out if your city or county offers any first time home buyer programs, contact your local housing department. If you don’t see what you need on their site, give them a call; they may have information on funding sources but haven’t posted it online yet.
If you want to buy a home but don’t have enough cash for a down payment, your city may also offer programs that provide low-interest loans with no down payment. Other cities offer grants that you pay back if you sell your home in a certain amount of time or at a set rate of appreciation. In some cases, these funds can be used to make repairs on your new home and even close escrow.
Before applying for any first time home buyer program, contact your city housing department to see what they offer and how it works. Every jurisdiction is different, so don’t assume their programs are identical to what you saw in another city when you did research.
