My husband and I are on a journey to save up for our first home. As beginners in the home-buying process, we’re trying to navigate and understand how everything works.
We were pretty down after a meeting with our credit union, which almost made us give up on buying a house. But we discovered something important: many credit unions and real estate agents don’t usually tell you 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 program can help by covering 30% (up to $50,000) of a property’s cost for first-time buyers. To qualify, your family’s income must be no more than 120% of your area’s median income.
2. **WISH and IDEA**: These give a three-to-one matching grant, up to $15,000, for families earning no more than 80% of the area’s median income. The funds can be used for down payments and closing costs. Look online for local workshops to get more details about these programs and how to qualify. They can also be combined with other down payment assistance programs.
3. **Federal Housing Administration (FHA) Loan**: If your income is too high for the above programs or you can’t get a loan on your own, consider an FHA loan. These loans require lower down payments and closing costs and are more flexible with credit requirements. Keep in mind, some home sales won’t accept FHA loans. Also, check about PMI (Private Mortgage Insurance), as recent laws sometimes require PMI for the entire loan period, not just until you reach 20% equity. This could add a couple of hundred dollars monthly, amounting to thousands over the loan term.
4. **State-sponsored Programs**: Each state has programs to help residents. The U.S. Department of Housing and Urban Development (HUD) lists all state home-buying programs. Check these out to find options for first-time buyers in your state.
5. **Good Neighbor Next Door Program**: If you’re a police officer, firefighter, teacher, or EMT, this HUD program might be for you. Eligible professionals can buy HUD homes at 50% off the appraised value if they live there for three years. Current homeowners or those who owned a home in the past year cannot apply.
In summary, there are many great programs available to help first-time homebuyers. Doing some research and understanding these options could be very beneficial.