Setting you up for Home Loan Success - What benefits can you receive?
As a First Time Home Buyer (FTHB) you have access to a few tools that others do not. Congratulations! Local Government agencies and the U. S. Department of Housing and Urban Development (HUD) have granted you access to aid in terms of grants and additional loans to aid in down payment and covering closing costs.
The questions now are, are there offers in your location and do you qualify for their offers?
Get With The Program
Programs galore are touted to the masses, but only certain programs actually work for locations in the Bay Area of California where housing prices may be a tough factor. Here are a few that may aid you in your house procurement possibilities...
FHA:
FHA is a loan program that is insured by the Federal Housing Administration, hence FHA. It allows for 3.5% down payment and the insurance is really for the lender/investor. A home buyer will pay an upfront mortgage insurance premium and a monthly premium, guaranteeing the lender/investor safe haven against any default. Though many think that this program is only for first time home buyers, the truth is it's available to all. A 580 fico score is the minimum requirement and a buyer can be approved with a Debt to Income Ratio (DTI) of up to 50% of their gross pay.
Cal HFA:
In California, there are programs for First Time Homebuyers that are provided by the California Housing Finance Agency. CalHFA offers programs associated with FHA, VA, and conventional loan channels. They further aid by offering additional loans and grants to those who fit into their income limits, credit score, and citizenship criteria. Education counseling courses are required and their programs may cover nearly all costs associated with purchasing a home, though those coverages are in the form of additional loans and grants.
GSFA:
Like CalHFA, there is assistance granted by California's Golden State Finance Authority (GSFA).. literally granted.
GSFA will give low-to-moderate income homebuyers in California assistance with down payment or closing costs in the form of a non-repayable 5% grant (5% of the total loan amount). This is a gift and not a second mortgage so there will be no lien against your new home. Like other programs, there are criteria. All who apply must have a credit score above 640, debt to income ratios no higher than 50%, like FHA, and have income that fall under the program's limits. Oh, and this must be your primary residence, not an investment home or second home.
DPAs:
Local governments and non-profits may also set up programs of their own. Brentwood, Modesto, Emeryville, Monterey County, and other localities entertain giving assistance to first time home buyers in terms of deferred payment loans and grants. These are typically set up for low-to-moderate income earners and below.
Are YOU A First Time Home Buyer?
If you've never owned a home before, this is an easy answer. The trick is, in some instances you may be termed a First Time Home Buyer even if you haven't owned a home in the last 3 years. Tricky tricky? I think it's more of a gimme gimme.
For more answers and specifics, please feel free to reach out to and we'll get you the straight answers for your situation.