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Special And
First-Time Buyer Programs
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If a lack of a
substantial
down payment is what is keeping you
from your dream home, then you will be glad to
know that there are many programs designed
specifically for first time homebuyers. Some may
allow you to put down lower
down payments -
sometimes as low as 3 percent - while others may
offer no down payment loans for those who
qualify. Ask your lender if they offer low
down
payment loans or provide first-time home buyer
programs.
Here are a few
specific agencies that may also be able to help:
-
Federal Housing Administration (FHA) --
The FHA is an agency of the Department of
Housing and Urban Development, and insures
residential
mortgage loans made by private
lenders. If you have FHA insurance, you can
buy a home with a low
down payment, either
ranging from 3 to 5 percent of the FHA
appraised value or the sale price of the
home, whichever is lower. FHA mortgages have
a maximum loan limit that varies according
to the average value of homes in a given
region.
-
Fannie Mae --
Offers a mortgage primarily to people with
modest incomes who want to become
homeowners. The mortgage, known as Fannie
Mae97, features a loan-to-value (LTV) of 97
percent, and requires only a 3 percent
down
payment on either a 25 or 30 year fixed
mortgage. To qualify for this mortgage,
borrowers must complete a pre-purchase
homebuyer education session.
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Veterans Administration --
The qualifications for VA loans are more
flexible than FHA loans or conventional
loans and allow veterans to buy a house that
costs up to $203,000 without the need for a
down payment. For qualification guidelines,
check with you nearest VA regional office.
-
Rural Housing Service --
Farmers and other qualified borrowers buying
property in rural areas who have trouble
obtaining loans elsewhere can apply for
loans from this agency. It offers low
down
payment loans as well as no down payment
loans to borrowers with low to moderate
incomes who live in rural areas or small
towns. Check with your local RHS office to
see if you qualify.
-
State and local government programs --
First-time homebuyers who meet specified
guidelines may qualify for loans sponsored
by certain state or local housing agencies.
These programs may offer low
down payment
and/or low interest rates. Others may be
able to assist in the down payment or
closing costs. Check with your state or
local housing authority for more
information.
Mortgage Glossary2
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