First Time Buyer Assistance Programs: Unlocking the Door to Your Dream Home

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First time buyer assistance programs help families and individuals pay for the costs and fees of buying a new home. It can be overwhelming to think about the expenses one needs to pay. In fact, most home buyers usually spend about seven years saving money to pay for the down payment. Fortunately, first-time buyer assistance programs are here to help. The type of assistance given can be in the form of loans or grants.

What is a First Time Buyer Assistance Program?

First time buyer assistance programs refer to programs intended to help first-time home buyers in paying for the necessary expenses like down payments, taxes, and closing costs. These programs can be provided by the federal government or other non-profit organizations.

Types of Assistance

Below is a list of the different types of first-time buyer assistance programs depending on your needs.

Down Payment Assistance (DPA)

This first-time buyer assistance programs help first-time homebuyers pay for downpayments. A downpayment refers to the initial payment needed to be paid by the homebuyer before availing the home.

Most DPA loans have low to no interest. Aside from loans, there are also DPA grants available. This refers to a grant given to qualified homebuyers in paying for the downpayment. Unlike loans, DPA grants need not be paid back by the homebuyer.

Closing Assistance

Closing assistance refers to first-time buyer assistance programs that help homeowners pay closing costs. Closing costs refer to fees that are paid at the end of the mortgage process. These grants can either be offered by the federal government or private organizations.

Tax Deductions

There are federal and state tax deductions that can help you save money especially if you are a first-time homebuyer. If your mortgage is worth less than 750,000 dollars, you can deduct your full mortgage amount for a primary home from your federal taxes. You can ask for this type of assistance from your local government.

Home Buyer Education

There are some education programs that can help you find first-time homebuyer assistance. You can start your search for this type of home-buyer assistance. You can either choose loans or grants to help you in your home buying.

Some first-time buyer assistance programs are offered by the federal government.

  • Government-Backed Loans: This type of first-time homebuyer assistance can help you buy a home with a low downpayment. Ask the program’s nearest branch about their specific qualifications to get started.
  • HomePath Ready Buyer Program: Fannie Mae’s HomePath program helps first-time homebuyers to get a foreclosed home with as low as a 3 percent downpayment.
  • Good Neighbor Next Door - If you are a teacher firefighter, technician, or law enforcement officer, you can avail of a Good Neighbor Next Door program which is funded by the Department of Housing and Urban Development (HUD). They mainly provide 50 percent off from selected HUD properties.

How to Apply to Assistance Program

The application process for first-time buyer assistance programs may vary depending on the type of program and location. Generally, you should take note of the general process of applying for such programs:

Step 1: Check your eligibility

The first step is to check whether you are eligible for the program you are applying for. Some general requirements include:

  1. Must be a first-time home buyer or haven’t owned a house for three years
  2. Household income should be less than the program’s income requirements. In most cases, first-time homebuyers should have less than 80 percent of the area's median income.
  3. Must afford the monthly debt payment.
  4. Must be able to pay additional out-of-pocket payments such as closing costs and remaining downpayment costs.

Step 2: Download your application

Most first-time buyer assistance programs require applicants to fill out an application form. You can download one from the program’s official website or from the office.

Step 3: Gather the necessary requirements

The next part is to collect all the necessary documents for the application process. The following are the general requirements you should prepare:

  • Application form
  • Proof of income
  • Verification of funds
  • Income tax return
  • Latest bank statements
  • Rent verification
  • Certificate of completion from a counseling workshop
  • Sales contract
  • Social Security card copy
  • State-issued cards of household members

Note: Requirements may vary depending on the program and your location.

Step 4: Attend the workshop

Most programs require applicants to attend a homebuyer counseling workshop as a part of the application process.

Step 5: Contact lender

Once you successfully finish the counseling workshop, now is the time you contact a lender in order to obtain a loan commitment.

Step 6: Identify the house/home you intend to buy

Now, it’s time to find the property you intend to buy. Take note that it should be in accordance with your pre-approved loan.

Step 7: Mortgage Commitment

After finding and securing a lender, s/he should provide a full mortgage commitment.

Step 8: Submit necessary requirements

After having accomplished the steps above, now it’s time to submit the documentary requirements to your lender. The lender will then submit the requirements to the federal program.

Final Word

There are many first-time buyer assistance programs out there where you can get assistance in buying a home. These programs can either be provided by the federal government or by non-profit organizations. I hope this article helped you find a first-time buyer assistance program for your needs.

Frequently Asked Questions

What are the Benefits of First-Time Homebuyer Assistance Program?

One of the primary benefits of a first-time homebuyer assistance program is that it helps to start individuals pay for downpayments, mortgage loans, and closing costs.

Who is Qualified for a First-Time Buyer Assistance Program?

First-time homebuyer programs are for people who are buying a home for the first time or people who haven’t owned a home for three years. You can’t be qualified for first-time homebuyer assistance if you own a rental or investment property.

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