September 28th, 2016 3:32 PM by Gregg Mower
What is a home buyer program you ask? It can be either a down payment assistance program or it can be a Mortgage credit of interest for certain income groups, or it can be a low down payment program to get home buyers into homes. Home buyer programs can be classified as first time home buyer programs that will only be offered to those who have not claimed mortgage interest on a primary home on their Federal Tax returns for the last 3 years and programs that are designed to get a certain groups of people, generally lower income groups, into homes. If you have not heard of these programs it could be beneficial for you to learn all you can as programs offered by the government or the private sector could end up saving you tens of thousands of dollars. Some programs have been a staple in lending for years and helped millions get into homes over the years.
Let’s explore some of the programs that are offered for home buyers to get into homes. The first and the oldest program for potential home buyers is the FHA loan. This loan has been around since 1933 and was designed to get folks into a home with a low down payment. It came out during the depression to stimulate the economy and has been around ever since. Today you can get an FHA loan with as little as 3.5% for a down payment. The flexibility with FHA, allowing for the 3.5% down payment to come from a gift, an employer, the government, non-profit agencies, and home buyer programs. FHA will also be more flexible in the underwriting standards than a privately insured conventional loan. FHA will allow people to get into homes with less than perfect credit as FHA believes that everyone deserves a chance to own a home. FHA loans will most likely be the underlying loan when coupled with other first time buyer or other home buying assistance programs. FHA loans are only insured by the Federal Government private companies such as MAE Capital Mortgage can originate these loans and offer them to you.
Most home buyer programs are designed to be for lower income people, although FHA has no income limitations, other programs that piggyback to the FHA loan will. These other programs may also have income limitations, meaning that you can’t’ make more than a certain amount of money annually to qualify. When looking at these programs, you should take into consideration your income when trying to qualify for a specialty home buyer program. The income limitation will vary from county to county so make sure you do your research before getting your hopes up to get one of these programs. Generally, the income limits are 115%-140% of the medium income for the county. For example, if you were trying to get a CalHFA loan the limits for Sacramento county would be $74,550 for a one-person household and $85,200 for 2, $95,600 for 3 and $106,250 for 4 and so on. If you make more that you would not qualify for the program. Your Loan officer would be able to do all the research for you for all programs that you would qualify for.
The programs available in today's are as follows:
There are programs that come in and out of the market all the time and some local counties may also offer special grants to low income home buyers. These programs would be known by one of our trained loan originators and can walk you through the maze of the different programs and the different qualifications needed to obtain one of these programs. Don’t be discouraged if you make too much money to qualify for one of these programs chances are we have a creative way to get you into home. Although, every one of these programs fall under the new lending rules that have been tightened up over the last several years. Be prepared to have your escrow go up to 2-4 weeks longer using one of these products as there are multiple agencies in some cases that must view and approve your loan or qualification for the program. All in all, these are great vehicles to you into a home where you might not otherwise have qualified. Here at MAE Capital Mortgage we value our clients and want to get them the best deal possible when applying for a mortgage. Feel free to call us today to see if you fit into one of these or other programs that may be out there 916-672-6130.