Buying a home can sometimes feel like a tedious process, especially for first-time home buyers. In addition to the tons of paperwork you’ll have to deal with, you’ll also have to understand the terminology, contact a number of people, calculate fees, and so on.
It’s tempting to feel like you want to get through the process as fast as possible, but you might overlook the useful first-time home buyer programs that can help you score huge savings. Here’s a look at some of them:
The Federal Housing Administration or FHA loan is one of the most commonly used programs in the US for first-time buyers. This type of loan gets lenders to expand their acceptance standards, as it can guarantee a portion of a home loan.
An FHA loan can help first-time buyers qualify for loans with a down payment of a s little as 3.5%. They do however, have an additional ongoing cost in the form of mortgage insurance premiums, which protects the stake of the lender in the loan in case you default.
Get more information on FHA’s first-time home buyer program by visiting their website.
Fannie Mae and Freddie Mac
Created by the Congress, Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Association) are two entities which play a huge role in the country’s home loan system. Both are government-sanctioned companies that work with lenders to provide a variety of mortgage options, including 3% down payments.
The US Department of Veterans Affairs assists veterans, current service members, and surviving spouses in the home buying process through VA loans. VA loans offer no down payment and mortgage insurance, and only come with a few requirements regarding sufficient income, debt, and other factors. However, VA lenders may add their own additional requirements for borrowers. Read about eligibility requirements, benefits, and how to apply for a VA loan here.
Not many buyers are familiar with the US Department of Agriculture’s home buyer’s assistance program, a zero down payment mortgage loan which focuses on rural areas and allows 100% financing by offering mortgage guarantees to lenders.
The USDA loan has low mortgage rates for eligible suburban and rural home buyers. Read more about the USDA home buyers program here.
Good Neighbor Next Door
Good Neighbor Next Door is an initiative created by the US Department of Housing and Urban Development (HUD) to provide opportunities for teachers, law enforcement officers, emergency medical practitioners, and firefighters to purchase homes in revitalization communities. The program provides 50% discounts off the list price of eligible homes located within these areas. Search for properties, locate revitalization areas, and get more information on the Good Neighbor Next Door program through HUD’s website.
Many state and local governments also offer other options for first-time home buyers, which you can find through the Department of Housing and Urban Development’s website.
Using one of the programs listed above can help you purchase your first property for a smaller down payment and a lower interest rate, giving you a much easier path towards homeownership.