First time homebuyer programs across the country, are meant to help aspiring homeowners with low or moderate incomes. They do this by assisting Americans to secure mortgages, even if they do not meet the pre-requisite requirements. They therefore help people to secure low interest mortgages, who cannot secure them from other lenders. This is made possible because these programs are backed by government organizations and hence the lenient qualification requirements. Some first time homebuyer programs even go ahead in catering for specific professions for instance education, military, and law enforcement. Below are some of the first time homebuyer programs available in Austin.
FHA Loans
Federal Housing Administration works closely with lenders to offer home loans to aspiring
homeowners who don’t qualify for the conventional loans. It does this by insuring the loan,
after which lenders feels comfortable to offer it to borrowers with weak credit score. This
home loan is not stringent; all you need is a minimum credit score of 500, a minimum down
payment of 3.5% which can run up to 20% and a maximum debt to income ratio of 55%,
Provided that you have not been declared bankrupt for the last two years. However, you
will have to cater for mortgage insurance premiums and closing costs. The advantage of
FHA loans is that you can pay down payment with gift funds.
USDA Loans
United States Department of Agriculture offers low interest home loans to low income
borrowers, who prefer living in rural and sub-urban areas. This program does not carry
any down payment as the department insures it. To qualify for the program, you must have
a household income not exceeding 115% of designated area median income. In addition, if
your credit score is over 680, you do not pay any down payment and you qualify for a low
interest loan. However, if your score is below 680 you are required to make a down
payment of 10% and you must be the primary resident of the home you intend to buy.
VA Loans
Department of Veterans Affairs offers home loans to military members which includes the first time homebuyers. The home loans often have low interest rates, as the department partners with lenders to offer the program at low or no down payment. To qualify for the program, you must be a veteran who has served continuously for 90 to 181 days. You also must have been in active duty for 90 days or more. If you qualify for the home loan, you have an option of choosing terms of 15 or 30 years. You are not required to pay any private mortgage insurance or any prepayment penalty.
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