A survey by the Harvard Business School found that 78% of baby boomers and millennials want to buy a home. The capture? Most ‘think’ they can’t afford one.
In many cases, this may be true. But the research also found that many can. He found that many had good enough income, credit, and time on the job to qualify for the many first-time homebuyer programs and grants I’ll mention in this article.
Note: For more details, google all phrases in bold.
1. Federal Housing Administration (FHA) loan.
If you have a credit score of at least 580, you could qualify for a mortgage for as little as 3.5 percent of the home’s price.
FHA loans have helped more first-time homeowners than any other type of loan.
2. United States Department of Housing and Urban Development (HUD).
HUD offers many first-time homeowner grants and low-interest loans, depending on the state, city, or area in which you live.
Note: For those who now live in public or government housing, you may qualify to purchase the house, condo, or apartment you now live in through HUD’s Public Housing Homeownership Program.
3. VA (Veterans Administration) Loans.
If you are an active duty person or a veteran, you may qualify for a loan with no down payment at a low interest rate. The VA loan is the lowest cost mortgage on the market because you are not required to pay mortgage insurance.
4. The Good Neighbor Next Door Program.
This first-time homebuyer program offers a home for up to 50% off the retail price. To qualify, you must be a teacher, police officer, firefighter, or EMT. A down payment of $100 is all that is required.
You must commit to living in the home for at least 36 months.
5. Energy efficient (or green) mortgage.
The Energy Efficiency Mortgage was created to help first-time homeowners add energy-efficient upgrades to their home. These loans are insured through the VA and FHA programs.
This mortgage allows you to build an energy-efficient home without having to make a larger down payment.
6. HomeReady HomePath Mortgage.
Another popular first-time homebuyer program. To achieve quality, you must take a short buyer’s education course. After completing the course, you will receive 3% toward the closing cost of a home loan. The down payment, 3%, is lower than the lowest FHA loan.
7. HUD Housing Dollar Program.
After 180 days on the market, certain unsold HUD properties are offered exclusively to local government entities for $1 for 10 days. The local city of counties then offers these properties to residents to revitalize communities or neighborhoods.
8. USDA Home Loan Program.
This program focuses on homes in primarily rural areas, if you like or can tolerate country living, this loan may be for you. This program guarantees 90% of the loan, which means that a down payment may not be required and the loan may be fixed. Sweet!
These are the top 7 programs available for first-time homebuyers. As always, like the waves of the sea, government programs come and go. But as of this writing, these programs are helping thousands of first-time homebuyers who thought they couldn’t afford a home realize their dream. Check them out… you could be next!
First-time homebuyers’ love and other gifts
1. No penalties.
A first-time homebuyer can take out up to $10,000 in Roth IRA contributions to pay for housing no penalties. Check with your tax advisor for the latest rules.
2. real estate agent. This person can be your greatest source of information when looking for your first home. They know their local real estate market, the pros and cons of specific homes. They can help you choose the right home to meet your personal and financial needs, and much more. The best part? They are free if you are a buyer.
3. Prior approvals. Another amazing freebie is pre-approvals. They help you save time and energy. As? They let you know what price range you can afford, helping you and your agent know which houses to consider.
4. First Time Home Buyer Tax Credit (HBTC): The HBTC is a non-refundable first-time homebuyer tax credit and is worth $750. The first-time homebuyer tax credit must be claimed on a tax form no later than one year after the home is purchased.
5. The RRSP Homebuyer Plan (HBP)
This program was designed to allow you to withdraw funds from your Registered Retirement Savings Plan (RRSP) before you retire for the purpose of buying a first home. The advantage of the HBP is that the withdrawal is completely TAX FREE.
The RRSP Homebuyer Plan allows you to withdraw up to a maximum of $25,000. Be sure to consult your tax advisor for more details.