Many potential home owners are hesitant to even dip their toes in the intimidating home ownership water. It seems a large part of that fear stems from thinking they can’t afford a home. A recent survey by rental service, Apartment List, found that 80 percent of millennial renters want to buy a home, but most say they can’t afford it. What you may not know is that there are quite a few programs out there that offer assistance. Here we have outlined a handful of those and provided links for further reading.
FHA, short for Federal Housing Administration, offers an insured mortgage. Having the FHA insure the buyer, gives the lender more confidence and adds a layer of protection. If a buyer defaults on their mortgage, the lender won’t experience any loss. The other benefit of an FHA loan is that it often comes with competitive interest rates, lower closing costs and smaller down payments than a conventional loan.
For more information about FHA loans visit: Florida FHA Loan Information
If you are active duty military, a veteran or a surviving spouse you might qualify for the U.S. Department of Vetrans Affairs assistance. The VA guarantees part of the loan and this allows lenders to offer special features. For instance VA loans come with competitive interest rates and require no down payment. You also won’t need to pay for private mortgage insurance and a minimum credit score isn’t needed to qualify. Lastly, the VA can negotiate with the lender on your behalf should payments on the mortgage become difficult.
For more information about VA Loans visit: VA Loans Florida
The US Department of Agriculture also has an ace up their sleeve. Not many people are aware of this buyer assistance program. This loan does focus on specific rural areas, however you do not have to buy or run a farm to be eligible. The USDA backed loan is guaranteed by the USDA and there is often no down payment required and the loan payments are fixed.
For more information about USDA Loans visit: USDA Loans in Florida
Fannie Mae/ Freddie Mac
Fannie Mae (Federal National Mortgage Association) and Freddy Mac (Federal Home Loan Mortgage Corporation) both act in the secondary mortgage market. They buy mortgages from commercial banks (Fannie) and smaller thrift banks (Freddie), package them together and re-sell them. This allows the lender to have cash on hand to make still other loans. These loans are great for many low- and moderate-income families. By having Fannie Mae and Freddie Mac backing, lenders can offer competitive interest rates and accept down payments as low as 3 percent of the purchase price.
For more information about Fannie Mae visit: Fannie Mae
For more information about Freddie Mac visit: Freddie Mac
If you thought you could never get the house AND make upgrades, you might be surprised. With Energy-efficient Mortgages (a.k.a. “green loans”), you might get your dream home and have capital to upgrade to features such as double paned windows, tank less water heaters or modern HVAC systems. Technically this is a second loan, but it can be rolled into your primary mortgage. The government supports EEM loans by insuring them through FHA & VA loans. The idea is to make homes more environmentally friendly, which ultimately puts less stress on our already dwindling resources. Maybe it’s time to think about going green!
For more information on Energy-efficient loans visit: Energy-Efficient Loans
Good Neighbor Next Door
If you are an emergency medical technician (EMT), a law enforcement officer, pre-kindergarten through 12th-grade teacher or a firefighter, you can receive a 50% discount on a home’s listed price in areas known as “revitalization areas”. In exchange for the deeply discounted home, the purchaser must commit to living in the home for 3 years.
For more information on Good Neighbor Next door visit: Good Neighbor Next Door
Native American Direct Loan
This program began helping Native American Veterans and their spouses in 1992. With this loan, qualifying individuals are able to finance purchasing, building or renovating their homes. With the Native American Direct loan the purchaser will not have to pay a down payment or private mortgage insurance. If it is used to purchase a home it will allow for low closing costs and a 30-year fixed-rate mortgage.
For more information about the Native American Direct Loan visit: Native American Direct Loan
Local programs and grants
When researching loans available to you, make sure to check out what your city and county offer. Here in the Pinellas County, Florida market there are several local grants and loan programs for eligible home buyers.
The long and short of it, is that homeownership is within your grasp. Make sure you do your research and hire a reliable and knowledgeable realtor. St. Petersburg is one of the most sought after places to live and with a little help you could be a homeowner here!