Buyer Tips

First Time Home Buyer Assistance Programs

Want to buy a home, but don’t have a down payment? Need some assistance with loans? There are many home buying assistance programs out there to aid first time home buyers. Buying a home is an important financial decision. It can also be a bit overwhelming trying to absorb all the information you need to make the decision and purchase your dream home and you may miss some great opportunities to help you in your purchase. We are here to help.

 

No Down Payment

Veterans have a few options for loans with no down payment. VA loans are available to qualified active duty and veterans. The loans are guaranteed by the VA and require no down payment. There is a fee which the borrow pays that can range from 1.25%-3.3% and can be set up to be repaid in the loan amount. For more benefits, eligibility, and more information head over to the VA home page.

 

Navy Federal also has a zero down payment option for qualified Navy  veterans. The fees are less expensive than the VA loans by 1.75% but they are otherwise similar. Read more on Navy Federal loans here.

 

Low Down Payment

 

The Federal Housing Administration (FHA) provides a service for lower down payments. This is a great program for those with little to not-so-great credit history. It requires mortgage insurance and allows borrowers to put as little as 3.5 down on their home. 1.75% of the loan amount is the fee for the mortgage insurance required. FHA has many different types of loans and requirements based on credit, loan amount, etc. It is definitely worth looking into to see if you qualify as a first-time buyer. Get more detailed info at their website.

 

Private mortgage insurance is similar to that of the FHA insurance, however the fees are lower and the requirements are a bit more strict with regards to your credit score and history. The insurance protects the lender from default and can be used on conventional loans. Some require an upfront premium to be paid while others can be added on to your mortgage depending on the lender. You can get all the details of mortgage insurance here.

 

Down Payment Help

 

St. Pete and Pinellas County offers a down payment assistance program with 0% interest. The loan is based on the purchase price of the home and the closing costs. According to the city of St. Pete’s website the loan amount is distributed as follows:

  1. An amount equal to ten percent (10%) of the purchase price shall be attributed to the down-payment;
  2. An amount equal to one percent (1%) of the first mortgagee’s loan amount shall be allocated to fund the up-front cost of the FHA Mortgage Insurance Premium (MIP) or the conventional Private Mortgage Insurance (PMI) premium.
  3. A maximum of $5,000 shall be provided to fund standard closing costs. However, should the borrower’s required one percent (1%) contribution to the transaction be insufficient to pay all additional and necessary prepaid items, the City shall consider funding those prepaid items in amount over and above the standard closing costs. In no case shall the total assistance exceed $20,000.

The loan can be forgiven after 120 payments and when the loan is balance have been reduced by 50%. The purchase price limit for single family, residential homes and condos is $168,000 for existing homes and $203,000 for new construction. For more information on all Pinellas County loans, check out their page.

Still have questions? Check out our tips for buyers page or contact us.