First-Time Homebuyer Programs

Oddly enough, first-time homebuyer programs aren’t necessarily just for people purchasing a home for the first time. While the requirements may vary from program to program, if it has been three years or longer since you owned a primary residence, you may be able to take advantage of first-time homebuyer programs.

The Benefits of Homeownership

Owning a home can provide you with significant benefits. For renters, a monthly rental payment is an expense. In contrast, a monthly mortgage payment is an investment for homeowners. As Money Crashers points out, people who own a home build equity as they pay down interest, enjoy federal tax deductions that are not available to renters, and have more freedom to make changes to their living environment than renters.

First-Time Homebuyer Programs

Buying a home is a complicated task, so we urge all aspiring homeowners to slow down and investigate homebuyer programs that might provide substantial savings. There are several first-time homebuyer programs that are worth exploring. In addition, there are many homebuyer programs that aren’t specifically for first-time buyers that individuals purchasing their first home can benefit from.

FHA Loan

The Federal Housing Administration offers a variety of programs for all sorts of homebuyers, including first-time homebuyers. FHA loans, which are loans offered by private lenders and backed by the FHA, can be a good choice for would-be homeowners because they don’t require excellent credit, they work with minimal down payments, and they keep closing costs low.

Good Neighbor Next Door Program

Designed to encourage people who help others as a profession become homeowners in areas in need of revitalization, the Good Neighbor Next Door Program is run by the U.S. Department of Housing and Urban Development (commonly referred to as HUD). It offers qualifying law enforcement officers, firefighters, emergency medical technicians, and teachers the opportunity to purchase select homes for 50 percent of the list price if they agree to make the property their sole residence for at least 36 months. While the choice of homes is limited, this can be an amazing opportunity to leave renting behind and become a homeowner.

Section 203(k) Loan Program

Many people buying their first home select a “diamond in the rough” in order to get more home for their dollar. While homes in need of fixing up often carry a lower price tag, getting enough money to both purchase the home and complete the necessary work can be challenging. A Section 203(k) loan may be the solution for aspiring homeowners in this situation. Another HUD program, these loans offer people the opportunity to combine the cost of purchasing and repairing a single-family home into one mortgage. Like FHA loans, Section 203(k) loans are provided by private mortgage lenders and insured by the FHA.

Fannie Mae’s HomeReady Mortgage

The Federal National Mortgage Association, better known as Fannie Mae, is a government-sponsored enterprise charged with stimulating homeownership by making financing available to lenders. Its HomeReady mortgages are affordable loans intended to help credit-worthy individuals purchase a home. With these loans, a down payment can be as low as 3 percent of the purchase price. In addition, income from sources that would generally not be considered for a standard loan can be used to help a person qualify for this type of loan, and not all borrowers are required to live on the property.

HomeReady mortgages do have one requirement that most loans lack: to qualify for this loan, borrowers must meet an education requirement by completing an online course designed to teach them about the responsibilities involved in buying and owning a home.

USDA Homeownership Loan Programs

The U.S. Department of Agriculture isn’t widely associated with housing issues, but it does offer loans in select circumstances to support homeownership in rural areas. In fact, there are multiple USDA loan programs that help low- and moderate-income families move from renting to owning by eliminating the requirement for a down payment and making homeownership more affordable. The possibilities include fixed-rate loans for qualifying people directly from the USDA and fixed-rate loans from private lenders that are guaranteed by the USDA. Eligibility for these loan programs is limited to rural locations and is based in part on the borrower’s income and the average median income for the area.

VA Home Loan

Provided by private lenders and backed by the U.S. Department of Veteran’s Affairs, VA loans allow qualifying veterans, service members, and their spouses to purchase a home at a competitive interest rate without requiring a down payment or spotless credit. Private mortgage insurance is not required because the VA insures the loan, which can result in substantial savings. There are also limits on closing costs, and borrowers cannot be penalized for paying the loan off early. In addition, people utilizing a VA loan who run into financial hardship and cannot make their mortgage payments can reach out to the VA for assistance.

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In addition to the programs listed above, many states and financial companies also offer first-time homebuyer programs that are specifically designed to help people transition from renters to homeowners. Many of these programs deliver substantial savings. To discover more about the programs that could help you reach your financial goals and purchase your dream home, schedule an appointment to talk with a financial professional.

If you are ready to buy a house for the first time and you live in the Kansas City area, contact PrimeLending today. Our team is committed to helping you navigate the home financing process, so that you can purchase the home of your dreams. At our branches located throughout Kansas City, we can help you explore our wide variety of loan products and programs. Plus, PrimeLending utilizes delegated underwriting, local appraisers, and cutting-edge technology to accelerate the underwriting and closing processes. When you’re ready to learn more, please give us a call at 844-701-5626.