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A first time home buyer is a person that has not owned a home in the past three years. These first time home buyer programs are always changing. The largest initial expense in the home purchase is the down payment. Fortunately, there are several options for down payment assistance and closing cost.
Lenders offer mortgage loan programs with down payments as low as 3% through various programs making homeownership more affordable.
Some programs don’t even require a down payment at all. Keep in mind that not all banks work with the programs available. Therefore, it is important to ask the lender if their company offers any first time buyer assistant programs and their requirements. Here we will cover some of the more advantageous programs for first time home buyers and the options available.
Down Payment Assistance
In this paragraph, I will discuss how the down payment assistance loans are usually structured. First, some payment assistance loans are structured as second mortgage to be paid at the same time as the principal mortgage. Second, they can be structured as deferred repayment, meaning these have to be repaid when you move, sell, refinance, or pay up your principal mortgage.
Some of these loans can also be forgiven after a predetermined period of time have lapsed. But, the loan must be repaid if you move, sell, refinance, or pay off your mortgage prior to the expiration of the determined time.
You might be eligible for a down payment assistant grant and although these are not always available, these don’t have to be repaid.
HUD Home Ownership – Florida
“Dare to Own the Dream” Homeownership Program – Tampa
Home Sweet Home Hillsborough Program – Hillsborough County
First Mortgage Program – Florida
Affordable Housing Funding Sources – Hillsborough County
Closing Cost Assistance
Closing cost range from 3 to 8% of the mortgage loan amount. Similar to the down payment assistance, there are programs that help cover the closing cost.
In a buyer’s market you can ask the seller for closing cost concessions to help you cover the closing cost.
Government Backed Loans
A government backed loan can help first time home buyers with a zero down home purchase. Some of these loans are the USDA loans and VA loans.
FHA loan – Has looser financial requirements. You may qualify with a lower credit score, recent bankruptcy or even debt.
USDA loan – Has location restrictions as it is only available in rural areas, check areas here.
VA loan – You will need a Certificate of Eligibility (COE). The fastest way to verify eligibility and determine the amount of entitlement is by accessing the VA’s benefits website here. There you will be able to check loan benefits and entitlement and print out a COE.
Other Programs
HomePath® Ready Buyer™ Program
This Fannie Mae program allows first time home buyers to purchase a foreclosed property in its as-is condition with a 3% down payment.
First Look Initiative
The First Look Initiative by Freddie Mac offers owner occupant home buyers and some non profits the ability to purchase HomeSteps homes during the initial 30 days of listings without competing with investors.
Good Neighbor Next Door
The Good Neighbor Next Door Program was designed to encourage public servants to contribute to community revitalization while becoming homeowners.
Habitat for Humanity
Habitat for Humanity is a non profit organization that helps vulnerable families build and improve their homes.
Neighborhood Assistance Corporation of America (NACA)
The Neighborhood Assistance Corporation of America (NACA) is a non profit homeownership organization with a primary goal to build healthy communities through affordable homeownership. Contact me to get you registered.
Employer-Sponsored Programs
Some employers and labor unions offer housing incentives to help employees cover the down payment and closing cost on their home purchase. It is worth checking if they have adopted any housing incentive initiatives.
