Buying your first home can be a daunting experience, especially when you look at the asking prices for homes across the country. The steps involved in obtaining a loan are intense, with the lender going through every part of your financial and private life. Thankfully, there are numerous programs designed just for you, and only you. First time home buyers can apply for special loans and grants to help with some, or all, of the purchase price.
Let us jump right in and take a look at the programs, loans, and grants available to you. Some of them have restrictions that you must meet, while others only require a mediocre credit level.
VA Affairs
The Department of Veterans Affairs will help you get into your own place if you are a veteran or the spouse of a veteran. The VA will usually approve you no matter what your credit score is, but the lenders that give these loans out will have their own sets of criteria that you must meet. If you do qualify for a VA loan, often times you will not be required to put a deposit down on the house you are after, which helps in big ways.
USDA Loans
The United States Department of Agriculture also has a loan program available. You do not have to be involved in farming to apply for these, but they do cater to people trying to buy homes in rural areas. They will also consider suburban areas if you met the stipulations that are put up as part of the loan. Which, of course, varies from area to area.
FHA Loans
Loans backed by the FHA (Federal Housing Administration) are one of the most popular choices for first time buyers. They are one of the easiest to get, especially if your credit score is no so great. If your score is higher than 580 you will probably only have to have 3.5% of the asking price as a down payment saved up. If you are below that, plan to pay up to 10% of the amount. The average credit score of borrowers over the last couple of years has been in the mid-600s, so you may find it a little tougher to get one if your score is lower than that. Every lender that offers these loans will have different requirements. MLD Mortgage is a mortgage broker buyers can choose from when searching around, so check them out.
Fannie Mae and Freddie Mac
If you have looked into first time home buyer’s loans you have ran across both of these names. They are the companies that work with your local lenders to connect you with the best options for you. Many times, they can get loans set up that only require 3% down, but many of these require a credit score in the mid to high 600s.
State and Local Programs
There are a few State and local area programs available to help with first time buyers. They will center around specific groups of people, depending on the area. Check with your local housing authority or do some searches online.
Good Neighbor Next Door Programs
The Department of Housing and Urban Development (HUD) will help you get into a house if you work in specific fields, such as a firefighter, police officer, or teacher. With this program you can get up to 50% off the house, which are usually homes that have gone into foreclosure and are already offered at affordable prices.
Habitat for Humanity
This program is limited to specific areas, but they are the largest non-profit home builders in the nation. They have volunteers build homes, which you will need to be a part of if you can, and they receive no funds during the closing of the house. They offer “decent, affordable, and simple” homes for low-income families. You will need to apply to see if you qualify.
Final Thoughts
That is about it when it comes to first time home buyer loans and programs that may be available. Some employers also have programs to help you get into your own home, you will just have to ask and see if you qualify for them. It may seem like you must go through some hoops to get some help from any of these helpful programs, and you may. In the end, though, when you are sitting inside your new house, you will be thankful that you took the time to complete all the steps that they required of you.