FHA - Many times when we hear about first time buyer programs, what we are really talking about is a standard FHA loan. This type of loan is guaranteed by the Federal Housing Administration. You still have to qualify to obtain financing, but FHA can be more forgiving than conventional loan programs. The biggest benefit of using FHA financing is that the down payment can be as little as 3.5%, while a conventional loan may require you to pay up to 20% of the purchase price as a down payment plus closing costs. FHA will also allow you to ask the seller to make a contribution toward your closing costs. You may also be able to accept a gift from a family member toward your closing costs.
Down Payment Assistance - There are also other assistance programs that actually help first time home buyers with the down payment. These are typically down payment assistance programs operated by local, state and federal governments. These programs may require you to attend home buyer classes, and may be strictly limited based on the economic status of the buyer. This can make them difficult to obtain, because you have to make enough money to qualify for the home loan. However, you cannot make too much money, or you may not qualify for the down payment assistance. These programs are also very under-funded and often do not have funds available to offer assistance. Many bank owned properties will not work with these types of assistance programs, because of the lack of funding and frequent delays.
Rent to Own
- I get calls and emails about lease purchase nearly every week. Many would be buyers have gone through a short sale or foreclosure that may be keeping them out of the market. Other potential home buyers have had their credit damaged by the prolonged weakness in the economy. Still other have had trouble saving for a down payment, because rent is taking up so much of their income. Now, there is a NEW program just for you. If you are interested in renting to own click Home Partners. They will let you know what "rent" you are approved for, and we can work together to find a house for sale that would qualify for their program. Then you have up to five years to purchase the home. If you don't qualify for the rent to own program, here is some help with rentals.
Contact me at 407-924-7670 or SellMyHome@DavidWelch.com if you have questions about buying your first home. I can put you in touch with a mortgage professional who can answer your questions.
by David Welch
Orlando Real Estate