My husband and I are on a journey to save for our first home. As beginners in the world of home buying, we’re trying to grasp all the complex details involved.
We were feeling pretty discouraged after a meeting with our credit union, thinking maybe our dream of owning a house wasn’t possible. But we discovered some useful information: many credit unions and real estate agents often don’t share details about certain programs for first-time homebuyers.
Here are five programs that can help first-time buyers afford a home:
1. **Neighborhood Stabilization Program**: This initiative can assist by covering 30 percent (up to $50,000) of a property’s cost. To qualify, your family’s income must be no more than 120 percent of your area’s median income.
2. **WISH and IDEA**: These programs offer a three-to-one matching grant, up to $15,000, for families with income not exceeding 80 percent of the area’s median. The funds can be used for a down payment and closing costs. Check online for local workshops that explain more about these programs and how you can qualify. They can also be combined with other down payment assistance programs.
3. **Federal Housing Administration (FHA) Loan**: If you don’t qualify for the previous programs or can’t get a loan on your own, FHA loans might be an option. They have lower down payment and closing costs requirements and are a bit more flexible with credit. However, note that some home sales might not allow FHA loans. Also, ask about PMI (Private Mortgage Insurance) requirements, as recent rules may require this insurance for the entire loan period, potentially adding hundreds of dollars to your monthly payment.
4. **State-sponsored Programs**: Every state offers different programs to help residents with home buying. Look up the U.S. Department of Housing and Urban Development (HUD) website to find programs specific to your state as a first-time homebuyer.
5. **Good Neighbor Next Door Program**: If you’re a police officer, firefighter, teacher, or EMT, this HUD program may be useful. Eligible professionals can buy HUD homes at a 50% discount, provided they live in the home for three years. Current homeowners are not eligible, nor are those who have owned a home within the past year.
In the end, there are several beneficial programs available to help first-time homebuyers. Taking the time to research and understand them can be really worth it.