First-time homebuyers often face challenges in purchasing a home or condo, but financial obstacles are the least of their worries. Many new homeowners are surprised to discover that their initial down payment is not enough for a mortgage. Many choose not to purchase a home, choosing to rent instead. But there are programs in place to help first-time homebuyers purchase a home. Find out the programs, how they work, and how to apply.
Here’s How First-Time Homebuyers Can Get Financial Help:
Federal Housing Administration (FHA) loan
The FHA mortgage program was designed for first-time homebuyers. It does not make loans directly; rather, it insures loans made by private lenders. These loans are popular because they’re easier to qualify for than non-FHA loans. These loans require a down payment of just 3.5%, and some loan programs allow borrowers with low-to-no credit scores to qualify. Also, FHA mortgages come with low closing costs and down payments, so first-time homebuyers can save a significant amount of money on buying a home.
The USDA, or United States Department of Agriculture, offers an excellent opportunity to first-time homebuyers. USDA loans, also known as guaranteed loans, have many benefits over other loan types, including lower down payment requirements and no private mortgage insurance. This loan program was started in 1934 as a way to help rural America and is still available today. They are a great way for first-time homebuyers to finance a home. If you have good credit, a USDA loan could be a great option for you.
Department of Veterans Affairs (VA) loan
The Department of Veterans Affairs (VA) offers home loans to qualified veterans. These loans offer a lower interest rate and more flexible qualifying requirements. But they also have some drawbacks. They are different from the regular loans that banks will give you. A VA loan falls under the U.S. Department of Veterans Affairs, a separate government entity. They are given only to service members, veterans, and surviving spouses.
National Homebuyers Fund
The Real Estate Settlement Procedures Act (RESPA) requires that your lender provide certain notices, disclosures, and documents to you, the borrower. These include loan estimates and closing cost statements. However, RESPA also has set up some programs to help Americans become homeowners, including the National Homebuyers Fund. This fund provides down payment assistance to help eligible people buy homes.
Chase Homebuyer Grant
Homeownership is one of the most rewarding investments; for many people, it’s the only way they can truly call home. However, it can often take years to save up for a home, and the process can be daunting and confusing for first-time homebuyers. Fortunately, there are programs designed to help first-time homebuyers get on the home-buying track sooner. One such program is the Chase Homebuyer Grant which provides a $5,000 grant up to $10,000 for first-time homebuyers. This grant helps first-time homebuyers purchase a home by offering them grants of up to $8,000. They can be used toward down payment and closing costs, in addition to any mortgage assistance, such as mortgage insurance, PMI, or FHA loans.
That’s a lot of help, but it can be the difference between buying and renting for first-time homebuyers who meet certain qualifications. If you’ve been thinking about buying your first home, now is a great time to do it. And, as first-time home buyers, you are eligible for some financial assistance. They can pursue a mortgage with a 3.5% down payment, and government-backed mortgages are also available.