How do you go about affording your first home? Some say with saving all of your pennies, others may beg family for personal loans, and even more may just forget the whole prospect because it seems out of reach. But not so fast! Did you know that there are grants and other programs geared towards helping first timers get that first home?
Here are several first time home buyer grants and programs designed to help you own a little slice of heaven:
If you have a credit score of at least 580 or higher, then you could be eligible for an FHA loan. You don’t need a huge down payment either – maybe just 3.5% of the house price. Closing costs may be cheaper and you still get great rates.
With an FHA loan, the loan is insured by the Federal Housing Administration. Given the easier requirements for borrowers, the lenders need a bit of protection in case of default.
The U.S. Department of Agriculture (USDA) offers an assistance program for home buyers. Its focus is on certain, typically more rural, areas, although the property doesn’t have to be a farm. The USDA guarantees their loans too.
You may not need any down payment at all, your mortgage payments are fixed, and there are income limits based on each region. You do need a certain credit score to be eligible.
If you have served, or are currently serving, in the military, the Department of Veterans Affairs offers a special loan with great rates and no need for a down payment. Better yet, you don’t need a minimum credit score, and may not need to pay for private mortgage insurance!
Good Neighbor Next Door
If you are a teacher, emergency medical technician, fire fighter, or in law enforcement, then you could be eligible for the Good Neighbor Next Door assistance program.
With this program, you could get up to a 50% discount off the price of a home within certain areas. Note that you must live in the home for at least 36 months.
Good ol’ Fannie Mae or Freddie Mac
These two government-sponsored organizations work with local mortgage lenders to offer mortgages to lower- and moderate-income families with great rates and lower down payment requirements.
Energy Efficient Mortgage (EEM)
If you love houses and the environment, then here’s a first time home buyer grant for you. The EEM loan program lets you make environmentally-friendly upgrades and renovations, such as adding new insulation, to your home. You don’t need a bigger down payment; the upgrade cost is rolled into your main mortgage.
Federal Housing Administration 203(k)
If you want to purchase a fixer-upper, then you need to check out 203(k) rehabilitation program.
Backed by the FHA, the 203(k) considers the value of your home after you have made the improvements. You then borrow the money you need to make those improvements within your main mortgage – no need for an extra loan.
Your state or city may also offer first time home buyer grants and assistance programs. For example, the Ocean State Grad Grant is geared towards recent grads who want to settle in Rhode Island, while the FirstHomes100 provides up to 100% closing cost assistance. These programs, and more, are offered only by eligible lenders such as Shamrock Financial.
Before purchasing a home, come in and talk with Shamrock Financial about the various local programs and first time home buyer grants that exist. We can help you find the right programs and offer the perfect mortgage products that will let you grab onto home ownership with ease. Let’s talk!