My husband and I are sailing through the voyage of accumulating savings for our initial home purchase. As novices in the home buying process, we found ourselves charting unfamiliar territory, trying to understand the intricacies of purchasing property.
Our spirits sank after a recent appointment with our credit union, leading us to almost give up on our dream of owning a house. However, we learned a valuable piece of information: many credit unions and real estate agents will not disclose the availability of certain schemes tailored for first-time home buyers.
Here’s a rundown of five such initiatives designed to help first-time homebuyers afford a property:
1. **Neighborhood Stabilization Program**: This program offers a bonus to first-time homebuyers by covering 30 percent (up to $50,000) of a property’s cost. To be eligible, your family’s income must not exceed 120 percent of the median income in your area.
2. **WISH and IDEA**: These initiatives provide a three-to-one matching grant, up to $15,000, for families whose income is no more than 80 percent of the area’s median. The funds can be applied to a down payment and closing costs. Do a quick online search to find local workshops that can provide more details about these schemes and how you can qualify. They can even be paired with other down payment assistance programs.
3. **Federal Housing Administration (FHA) Loan**: If your income doesn’t qualify for the above-mentioned schemes and you cannot qualify for a loan on your own, consider FHA loans. They feature lower down payments and closing costs and are a little more lenient on credit requirements. However, be aware that some home sales don’t allow FHA loans. Also, don’t forget to ask about PMI (Private Mortgage Insurance) requirements, as recent legislation sometimes mandates PMI coverage over the entire loan period instead of just until 20% equity is reached. This could potentially add a couple hundred dollars to the monthly installment, leading to thousands of extra dollars over the loan period.
4. **State-sponsored Programs**: Each state provides unique schemes aimed at assisting residents. The U.S. Department of Housing and Urban Development (HUD) catalogues all state home buying programs. Explore these to find programs suitable for first-time homebuyers in your state.
5. **Good Neighbor Next Door Program**: If you are a police officer, firefighter, teacher, or EMT, this HUD program might be beneficial. Qualified professionals can purchase HUD homes at 50% off the appraised value under the condition that they live in the residence for three years. However, current homeowners are not eligible, nor are those who have owned a house within the past year.
In conclusion, there are multiple advantageous initiatives out there designed to aid first-time homebuyers. A bit of effort in researching and understanding them could be greatly rewarding.
