Making the decision to become a first-time home buyer can be so overwhelming that you may feel like being a lifelong renter is the thing for you. One of the most nerve-racking (and least fun) things to do during the home buying process is securing financing. After hearing horror stories, just the thought of doing so makes some people nervous. If that’s your worry, relax, we’ve got you covered!
If you’re looking to finance the purchase of a home and find that your piggy bank is a little light, a first-time homebuyer program may be the thing for you. We’ve listed 5 first-time homebuyer programs to help you choose which is best for you. So, let’s take a deep dive, shall we?
- FHA Loan Program
This a solid option amongst the different first-time homebuyer programs. Insured by the Federal Housing Administration, this program comes with smaller down payments and lower credit score requirements. With this program, first-time homebuyers can purchase a home with a minimum credit score of 580 and with a down payment as low as 3.5%. If your credit score is below 580 and ranges between 500 and 579, you’ll need to make a down payment of around 10%.
FHA loan qualification is not as severe as most conventional loans when it comes to credit score. Thus, it’s best for buyers with low credit scores and smaller down payments. However, if you’ve experienced bankruptcy recently, you’ll definitely have a hard time qualifying for this program.
- USDA Loan Program
The U.S. Department of Agriculture guarantees or issues low-interest loans to low-income individuals who live in rural areas. Borrowers can get up to 100% financing. To qualify for a USDA loan program, you need to have a credit score of 640 or higher. Also, you’ll be required to buy a home in a USDA-eligible area.
If your credit score sinks below 640, you’ll need to show proof of your payment history to get a stamp of approval.
- VA Loan Program
The Department of Veterans (VA) issues loans to many qualifying U.S. military members (Veterans and active duty) as well as first-time homebuyers. Though VA loans require a funding fee, they are the best deals. They require no down payment and carry lower interest rates than other conventional programs. To be eligible, you must meet one of the following criteria:
- Be an active-duty service member for a minimum of 90 continuous days
- Be a Veteran with a minimum of 90 to 181 days of continuous service
- Be the unmarried surviving spouse of a deceased service-member or Veteran who died in the line of duty
- Be a National Guard or Reserve member for at least six years
Do you meet this criteria? If so, contact me so we can start the process of making you a homeowner!
- NADL Program
It is worth looking at the NADL (Native American Direct Loan) as it offers financing to qualified Native American Veterans to purchase, renovate or build a house on federal trust land. This loan has no private insurance requirements or down payment. In addition, its closing costs are low. To qualify, you must fulfill one of the following requirements:
- Be part of a tribe that has set a Memorandum of Understanding with the VA
- Be married to a qualified individual
- Be a Native American registered in an American Indian tribe
- Apply for a VA home loan Certificate of Eligibility (COE)
This program is best for qualified Native American Veterans desiring to purchase a home on federal trust land.
- Good Neighbor Next Door Aid Program
This program is backed by the Department of Housing and Urban Development (HUD). This program enables you to receive a discount of 50% for homes in “revitalization areas” provided you agree to live in the home for at least 36 months.
It is important to note that is a highly competitive program. Nonetheless, it’s best for teachers, firefighters, law enforcement officers, and emergency medical personnel.
Navigating through first-time homebuyer assistance programs is an important first step when embarking on a journey to homeownership.
Here are other available programs for you if you are not a first-time homebuyer.
- FHA 203(k) Loan
- National Homebuyers Fund
- Dollar Homes
- HomePath Ready Buyer
- Energy Efficient Mortgage
Contact me today at dawid@djablonski.com so we can find the perfect property and program for you!
