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NEW YORK â€“ April 28, 2017 â€“ Buying a home for the first time can be daunting. In addition to mountains of paperwork and new financial terms to sort through, you’ll face costs and fees that can quickly add up.
Fortunately, many grants and programs exist to help first-time homebuyers. Here are some of them:
With this option, the Federal Housing Administration, or FHA, insures the mortgage. The FHA is an agency that operates within the U.S. Department of Housing and Urban Development, or HUD. Lenders receive a layer of protection and won’t experience a loss if you default on the mortgage.
FHA loans typically come with competitive interest rates, smaller down payment requirements and lower closing costs. Buyers with a credit score of 580 or higher could be eligible for a mortgage with a downpayment as low as 3.5 percent.
The homebuyer assistance program of U.S. Department of Agriculture focuses on residences in certain rural areas. And you don’t need to purchase or run a farm to be eligible.
Through this setup, the USDA guarantees the loan. There may be no down payment required, and the loan payments are fixed. Applicants with a credit score of 620 or higher typically receive streamlined processing.
The U.S. Department of Veterans Affairs helps service members, veterans and surviving spouses purchase homes. The VA guarantees part of the loan, which makes it possible for lenders to offer some special features.
VA loans offer competitive interest rates and require no downpayment. You may not be required to pay for private mortgage insurance, and there isn’t a minimum credit score needed.
Good Neighbor Next Door
This program is sponsored by HUD and focuses on providing housing aid for law enforcement officers, firefighters, emergency medical technicians and teachers.
Through this program, you could receive a discount of 50 percent off a home’s listed price in specific regions known as revitalization areas.
Fannie Mae or Freddie Mac
Fannie Mae and Freddie Mac are government-sponsored entities. They work with local lenders to offer mortgage options that benefit low- and moderate-income families.
With the backing of Fannie Mae and Freddie Mac, lenders can offer competitive interest rates and down payment amounts as low as 3 percent of the purchase price.
Energy Efficient Mortgage
This type of loan’s purpose is to help you add improvements to your home that will make it more environmentally friendly. The federal government supports Energy Efficient Mortgage loans by insuring them through FHA or VA programs.
The key advantage to this grant is that it allows you to create an energy-efficient home without the need to make a larger downpayment. The amount is rolled into your primary loan.
Â© Copyright 2017, Erie Times-News, Rachel Hartman. All rights reserved.