A funny thing—when people ask for a “first time homebuyer program” what they REALLY WANT is a loan that helps them qualify or makes things cheaper. Perfect – because so many of the best programs don’t even require a “first time home buyer.” (***BTW – First Time Homebuyer is technically defined as – one who hasn’t owned real property in the previous three years.”)
So in that spirit – I’m going to hit the BIGGEST NEEDS new home buyers have and the SPECIAL PROGRAMS that can help.
Down Payment Assistance
Sometimes savings in the bank is limited—but the time to buy a home is right. Hence down payment assistance.
Utah County Loan to Own – Other counties have programs too but this program is Utah County only. Nearly every city in Utah County participates with the Loan to Own program (Provo has its own). Currently, upon qualification you can borrow up to 40k for down payment and closing costs. A huge help! (This loan is just for first time homebuyer’s
USDA Guaranteed Rural Housing – USDA offers a zero down payment loan if you purchase in their designated areas. For example, Eagle Mountain, most of Saratoga Springs and South and West of Spanish Fork are Utah Counties allowed areas. This can be a fantastic loan with low rates and low mortgage insurance.
VA Loan – If you are a qualified Veteran, the VA offers a zero down payment loan with no monthly mortgage insurance. Tough to beat this one! Really good loan for veterans.
Utah Housing – This works all over the state and is a conventional or FHA loan with a second mortgage for the down payment and at least a portion of the closing costs. So it is another no down payment option.Rates are slightly higher typically, and you can’t rent the house out if you had to move without selling the home, but this loan can be a huge help in certain situations.
Conventional 3% Low Down Payment – Many think conventional lending is never for first time buyers. Not true. This 3% down product has many advantages over many of the no down payment programs. One of which is a mortgage insurance payment that is potentially cancellable down the road.
FHA 3.5% Low Down Payment – FHA’s minimum down payment is slightly more than Conventional, but it has other advantages. We’ll hit a couple of these points in a second.
Lower Interest Rate Needs
With interest rates increasing over the last 6 months it helps to find a lower rate. Often you pay more for the special loans but there are a couple exceptions:
Homepossible/Homeready – these are conventional loans that can be done with 3% down (or more). They have a few more qualifying restrictions, but they also have a lower interest rate and mortgage insurance rate then their counterparts. A really good loan.
USDA/VA/FHA – These three loans are considered “government” loans. They often carry a slightly (sometimes significantly) lower interest rate than conventional loans.
Bruised Credit
FHA/VA – Maybe you’ve gone through significant credit issues in the last 3-4 years. Even more recent. FHA is fantastic if you have had clean credit for about 1 year. VA can also be a big help.
Conventional loans can also help more than most people realize, but FHA and VA are the leaders in the race to help bruised credit buyers get that home.
Higher Debt Payments
Finally, some buyers feel they have too much debt to qualify.
FHA/VA – Once again FHA and VA lead out here. With probably the most liberal debt ratio allowances of any home loans, FHA and VA can help you qualify when other loans close the door. I’ve seen them even recently approve individuals who have as much as 56% of their monthly income going to debt payments. Definitely loans to keep in mind as you shop different loan programs with your lender.
Hope this has been helpful for you. Put my 20+ years closing loans to work for you!
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