Thinking of buying a home? The process can be overwhelming, especially for first-time buyers. Unless you have all the money to buy a home, you may need some kind of financing. Fortunately, there are quite a number of useful government grants or programs that first-time home buyers can highly benefit from in terms of cost savings. Here is a list of some of these programs.
The Federal Housing Administration (FHA) Loan
The Department of Housing and Urban Development (HUD), under which the FDA operates, awards a considerable amount of dollars annually to make home ownership to as many people as possible. The FHA loan is a program for most people, especially first-time home buyers as well as those with a relatively shaky credit history. The FHA’s backing allows the borrowers to qualify for loans with little or competitive interest rates, lower closing costs, and smaller down payments compared to the other conventional loans. The backing also provides some level of protection to the lenders, which protects their stake in the loan in the event that you default.
If your credit score is above the FHA’s threshold, you could be eligible for mortgages with down payments of a very low percentage of the purchase price. While you might still qualify for the loan with a credit score that is lower than the threshold, the down payments you would be required to pay will be of a much higher percentage.
This is for those who intend to make some improvements to their homes, particularly to make them more environmentally friendly. These loans are usually insured through the VA and FHA programs. You don’t necessarily have to make larger down payments. Besides, extra costs are usually rolled into the primary loan.
The Department Of Agriculture Loan
The Department of Agriculture also has an assistance program for homebuyers. You don’t need to be a farmer or necessarily live on a farm to qualify for the home loans offered by this department. However, the program focuses on homes in certain rural areas. This is because the Department offers these loans through a Rural Development Program. Usually, home loans from this department are guaranteed. The loan payments could be fixed and down payments may not even be required. Streamlined processing of the loans is provided for those with credit scores above the required threshold. If you have a lower credit score, you may be needed to provide extra documentation concerning your payment history. There may also be income limitations but these would vary by regions.