January 26th, 2017 5:09 AM by Jackie A. Graves, President
If you dream
of owning a home, there are programs to help your dreams of homeownership
become a reality. Whether you're a disable veteran or nurse, teacher or police
officer, natural disaster victim or rural homeowner, there are programs
available to assist you. We're going to give you a rundown of the home buying
programs available, and help you decide which is best for you.
Home Buying Programs
of Housing and Urban Development
a program that is a government funded program aimed at supporting individuals
in achieving the American dream of homeownership? Look no further than the
Department of Housing and Urban Development. Also known as HUD, it has eleven programs to consider:
Homeownership and Opportunity for People Everywhere: Also
known as HOPE I, this program offers grants to low income families to purchase
public housing units.
Energy Efficient Mortgage Program: An
Energy Efficient Mortgage (EEM) allows families to include the cost of energy
saving measures, such as solar, into their mortgage. Borrowers are often able
to qualify for larger loans and stretch their debt-to-income
Good Neighbor Next Door: HUD offers a discount on
the sale price of the home to teachers, firefighters, law enforcement, and
emergency medical technicians in exchange for living in the neighborhood for
Next Door: This program offers homes to teachers at a discounted
rate with fewer fees and a low interest rate.
Nurse Next Door:
This program offers home buying assistance grants to medical
Mortgage Insurance for Disaster Victims: The
Federal Housing Administration (FHA) insures mortgages offered to victims of a
major disaster who have lost their homes and are in the process of rebuilding
or buying another home.
Mortgage Insurance for One- to Four-Family Homes: The
FHA insures mortgages used to finance the purchase of new or existing one to
four family housing with limited fees.
Insurance Programs on Indian Reservations and Other Restricted Lands: This
program offers up to 97% financing to tribal members who qualify.
Self-Help Housing Property Disposition: This
HUD program offers surplus housing at lower than market values to non-profits,
as well as state and local entities.
Single Family Property Disposition Program: Non-profit
and government agencies may purchase homes at a discount from the FHA. These
are one- to our-family properties that have been foreclosed on.
The American Dream Downpayment Assistance Initiative: The
HOME program offers assistance to low income families who are first-time home
looking to buy in a rural area or invest in a farm? The United States
Department of Agriculture and Rural Development or USDA's mission is to enhance
and develop both the economy and quality of life in rural America.
comes to housing, USDA has four programs to consider:
Single Family Housing Direct Home Loans: This
program is also known as the Section 502 Direct Loan Program, and it assists
low income applicants to obtain decent, safe and sanitary housing in rural
areas. The program offers payment assistance that reduces the mortgage payment
for a short time.
Single Family Housing Home Loan Guarantees: This
program provides low- to moderate-income households with assistance in buying
adequate, modest, decent, safe and sanitary dwellings as a primary residence in
Mutual Self-Help Housing Technical Assistance Grants: This
program provides grants to non-profits and government agencies to help low
income families to construct a home in rural areas.
Rural Housing Site Loans: Section 523 loans are
used to acquire and develop sites for housing constructed by the Self-Help
method. Section 524 loans are made to acquire and develop sites for low- or
moderate-income families, with no restriction as to the method of construction.
Housing Administration (FHA) has a three home buying programs to consider:
FHA Loan: These loans are meant to help people become
homeowners with low down payments, low closing costs, and easier loan
Limited 203(k) Mortgage: FHA's Limited 203(k)
program helps home buyers and homeowners finance up to $35,000 into their
mortgage to repair, improve, or upgrade their home.
Mortgage: Borrowers who qualify for an FHA loan may also be able to
finance renovations and rehabilitation through this program.
Fannie Mae and Freddie Mac
are two government sponsored enterprises
(GSE) formed by congress. Although they are privately owned, they receive
support from the government in the guidelines that they set for mortgages and
borrowers. Fannie Mae and Freddie Mac have three programs to consider:
1. Conventional 97
Who does not
like a little competition? The Conventional 97 was created as a direct rival
for the FHA loan. Here are five key aspects of the program:
must be a first time home buyer or not bought a home in the last three years.
Income: No limit.
Down Payment: 3%.
Loan Type: A fixed
rate loan only.
PMI: PMI on the loan will
automatically drop off when the mortgage has a 80% loan-to-value
Not a first
time buyer, but still want the benefits of a conventional loan with a low down
payment option? The HomeReady program was made with you in mind. Here are seven
key aspects of the program:
do not need to be a first time home buyer.
you live with family members or roommates? You can use their income to qualify
along with your own income without the worry that they will be considered a borrower on
Income: There are income
Loan Type: A
fixed rate loan only.
PMI: PMI on the the loan
will automatically drop off when the mortgage has a 80% loan-to-value
Class: In order to qualify
for this program, participants are required to take a homeownership class.
3. Home Possible Advantage
option of either a fixed mortgage or an adjustable rate mortgage while still
having the benefits of a conventional loan with a low down payment option? The
Home Possible Advantage was made with you in mind. Here are six key aspects of
Repeat home buyers and first time home buyers welcome to apply.
Income: No limit as long as
the home being bought is in an underserved community.
Loan Type: A
fixed rate loan or ARM
Class: In order to qualify
for this program, participants are required to take a homeownership
Department of Veteran Affairs, also known as the VA, offers Veteran's
Administration loans for those who have served the nation. The
Veteran's Administration has three programs to consider:
1. Purchase Loans
five key aspects of the VA purchase loan program:
Check out eligibility requirements through the VA.
Down Payment: No
down payment needed.
PMI: No PMI required.
is designed for service individuals with a service-related disability to help
them build, remodel, or purchase an adapted home.
Specially Adapted Housing (SAH) grant is available to certain Veterans and
service members who are entitled to disability compensation.
Specially Adapted Housing (SAH) Grant: Up
to $73,768 for qualifying veterans to modify their home to meet their needs.
Special Housing Adaptation (SHA): Up
to $14,754 to increase the veterans mobility within their home.
Temporary Residence Assistance
(TRA): Temporary grant available to SAH/SHA eligible Veterans and service members
who are temporarily residing in a home owned by a family member.
Home improvement benefits up to $6,800 may be provided to Veterans with
3. Native American Direct Loan (NADL)
offers VA home loan guarantee benefit on Federal trust land to eligible Native
American Veterans and their spouses.
must obtain a
Certificate of Eligibility.
Down Payment: No
Loan Type: A
fixed rate 30-year mortgage.
PMI: None required.
to the National housing programs, HUD offers a list of local home buying programs by state. You might search for programs offered through Housing and
Community Development programs, housing finance agencies, the U.S. Department
of Agriculture Rural Housing, or Habitat for Humanity. For example, the
Connecticut Housing Authority offers a homeownership program for police officers. There are also many options available for teachers,
nurses, and firefighters.
also ask about home buying programs for single moms. Many of the national
programs are available to single moms, but if you're a single mother hoping to
qualify for a mortgage, your best option is to contact your local government to
see if there are any local home buying programs that could help too.
deciding which home buying program is right for you, it is important to
consider four elements of each program requirements:
If you would
like the benefits of a conventional loan where your PMI
eventually drops off with similar low down
payment options as an FHA loan, then one of the three Fannie Mae and Freddie
Mac programs may be best for you.
If you are a
law enforcement officer, teacher, firefighter, or emergency medical technician,
one of the HUD programs may be a good fit. You may also want to look at the Everyday Hero Housing Assistance
If you don't
mind living further from town, in rural areas, and like the idea of a 0% down
payment, then one of the four options from the USDA may be best for you.
If you are
looking for a government insured loan with a low 3.5% down payment, then an FHA loan
may be best for you.
If you are a
veteran, you can't beat VA loan benefits and should definitely utilize the
opportunities offered through that assistance.
By Ralph W.
Miller - To view the original article click here