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Homebuyer
Assistance Programs
There are a
number of different programs available for first-time homebuyers.
Many people start the homebuying process with one of these programs,
or with a program offered by a local community organization. The
following are brief outlines of the most common homebuyer assistance
programs:
Federal
Housing Administration (FHA) Insured Loans
The 203(b) is the most common FHA loan, featuring:
- Low downpayment
- Flexible
qualifying guidelines
- Limited
lender fees
- Maximum
loan amounts
Department
of Veterans Administration (VA) Insured Loans
Features of VA loans include:
- You must
be an eligible veteran
- There are
no downpayment requirements
- Competitive
and negotiable fixed interest rates
- Limitations
on closing costs
- Longer payment
terms
Federal
National Mortgage Association (FNMA) Loans
The FNMA Community Homebuyers Program features:
- 5% downpayment
- Expanded
debt-to-income ratios (33% and 38%)
- You must
attend homebuyer education
- You must
earn no more than the median income for the area in which you
live
- One family
principal residence
The Fannie 97
Features include:
- Fixed rate
- 3% downpayment
- Expanded
debt-to-income ratios (33% and 38%)
- You must
attend homebuyer education
- You must
earn no more than the median income for the area in which you
live
- You must
have saved money for one month advance payment in an account at
closing
The Flexible
97 Features include:
- You must
have very good credit
- 15, 20,
25, and 30-year terms
- 3% downpayment
can be a gift or a grant from nonprofit or government agency
- No borrower
income limits or property location restrictions
- Up-front
mortgage insurance costs are lower than FHA loans
The Fannie 3/2
Features include:
- Fixed rate
- 15 or 30
year term
- 5% downpayment
–3% from your own resources, 2% from a government agency,
nonprofit organization, employer, or private foundation
- Expanded
debt-to-income ratios (33% and 38%)
- You must
attend homebuyer education
- You must
earn no more than the median income for the area in which you
live
United States
Department of Agriculture (USDA) Rural Housing Services
The 502 Rural Housing Direct Loan is offered only in rural areas.
Features include:
- You must
have low income—between 50% and 80% of the median income
for the area in which you live
- The loan
can be financed at 100%
- Payments
are usually 22% to 26% of your income
- You must
not be able to obtain financing elsewhere
502 Single Family
Housing Loan Guarantees features:
- You can
earn up to 115% of the median income for the area in which you
live
- You must
be without adequate housing
- You must
be able to afford the payments
- You must
not be able to obtain credit elsewhere
- 30-year
term
- No downpayment
502 Mutual Self-Help
Housing Loans features:
- Primarily
used to help low and very low income households construct their
own homes
- Intended
for families unable to buy clean, safe housing through conventional
methods
- Families
must perform at least 65% of construction labor on each other’s
homes under qualified supervision
- You must
be unable to get credit elsewhere
- You must
be able to make payments
- Payments
are usually 22% to 26% of your income
- 33 or 38-year
terms
- No downpayment
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