First time home buyers

First-Time Home Buyer Programs For 2019

First-time Home Buyers

Buying a house is a big decision—and it’s one many Americans are now putting off due to looming student loan debt and ever-rising home prices. Fortunately, delaying your purchase isn’t the only way to afford buying a home.

Thanks to a wide array of state and federal first-time home buyer programs, qualifying for a mortgage and purchasing a house may be easier than you think.

Federal First time Home Buyer Programs

Your first option as a new home buyer is to apply for a mortgage backed by a federal program. Federal first-time home buyer programs offer both low-cost mortgage options as well as down payment and closing cost assistance.

There are a number of sources for these programs, including the Federal Housing Administration, the Department of Veterans Affairs, and the U.S. Department of Agriculture.

FHA First Time Home Buyers Program & Down Payment Assistance

The Federal Housing Administration is a government agency that insures mortgages issued by FHA-approved lenders across the country.

FHA-insured loans are designed to make home ownership more affordable for lower- and middle-income earning Americans.

Eligibility

Each lender may impose their own eligibility requirements. But here are the general qualifications required by the FHA:

  • Minimum Credit Score: 500
  • Minimum Down Payment: 3.5% (with a 580 credit score), 10% (with a 500 credit score)
  • Income Limits: 31% debt-to-income ratio (housing costs only); 43% debt-to-income ratio (all monthly debts included)
  • Property Requirements: Must be your primary residence; Must meet HUD minimum property standards
  • Other Details: Requires mortgage insurance up-front and annually

VA First-time Home Buyer Program & Down Payment Assistance

The Department of Veterans Affairs also offers popular loans for first-time home buyers.

Designed specifically for veterans, military members, and their surviving spouses, VA loans require no down payment and offer 100% financing. This means you can roll your closing costs into the loan balance and pay them off over time.

>> Read More: Best VA Lenders: 0% Down Payments for Veterans

Eligibility

Eligibility requirements can vary from one lender to the next. But here are the basic qualifications required by the Department of Veterans Affairs.

  • Minimum Credit Score: Varies by lender, but generally 620 or higher
  • Minimum Down Payment: None
  • Income Limits: 41% debt-to-income ratio (all monthly debts included)
  • Property Requirements: Must be your primary residence
  • Other Details: Must meet military service requirements (See VA.gov for details)

USDA First-time Home Buyer Program

The U.S. Department of Agriculture also offers home loan programs that can make buying a house more affordable. USDA loans require no down payment but are only available for real estate purchases in eligible rural parts of the country.

Eligibility

Eligibility may vary by lender, but here are the basic qualifications required by the USDA.

  • Minimum Credit Score: Varies by lender, but generally 640 or higher
  • Minimum Down Payment: None
  • Income Limits: You can’t make more than 115% of the median household income for the area; 29% debt-to-income ratio (housing costs only); 41% debt-to-income ratio (all monthly debts included)
  • Property Requirements: Must be your primary residence; Must be located in an eligible rural area

NADL First-time Home Buyer Program

The Native American Veteran Direct Loan is offered to Native American Veterans and their spouses. The program offers low interest rates and requires no down payment or private mortgage insurance.

Eligibility

Eligibility may vary by lender, but here are the basic qualifications required by the VA.

  • Minimum Credit Score: Varies by lender, but generally 620 or higher
  • Minimum Down Payment: None
  • Income Requirements: 41% debt-to-income ratio (all monthly debts included)
  • Property Requirements: Must be your primary residence; Must be located on Federal trust land
  • Other Details: You must have a valid Certificate of Eligibility from the Department of Veterans Affairs

The Good Neighbor Next Door Program

Good Neighbor Next Door is a low-cost home buying program designed for public servants, including police officers, teachers, emergency medical technicians, and other similar professionals. Qualified buyers receive 50% off HUD-owned properties in their area.

Eligibility

Eligibility may vary by lender, but here are the basic qualifications required by the U.S. Department of Housing and Urban Development.

  • Minimum Credit Score: 500 for an FHA mortgage
  • Minimum Down Payment: $100 if you qualify for an FHA mortgage
  • Income Requirements: 41% debt-to-income ratio (all monthly debts included)
  • Property Requirements: Must be your primary residence for three years; Must be a HUD-owned property
  • Other Details: You must be a qualified public servant

203k Rehab Loans

FHA 203k loans are an option if you’re looking to purchase a fixer-upper or home that requires significant repairs. These mortgages come with all the benefits of a traditional FHA loan, while also giving you the funds necessary to renovate and repair your property prior to move-in.

Unlike other first-time home buyer government programs, 203k loans can exceed the property’s value up to 10%.

Eligibility

Eligibility may vary by lender, but here are the basic qualifications required by the FHA.

  • Minimum Credit Score: Varies by lender, but usually 580 or higher
  • Minimum Down Payment: 3.5%
  • Income Requirements: 31% debt-to-income ratio (housing costs only); 43% debt-to-income ratio (all monthly debts included)
  • Property Requirements: Must be your primary residence; Must meet HUD minimum property standards
  • Other Details: Requires mortgage insurance up-front and annually

 

See the full article here: First-Time Home Buyer Programs for 2019

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