What You Must Know About the First Time Homebuyers Program

What You Must Know About the First Time Homebuyers Program

Things To Know About First-time Homebuyers Program

  • Eligibility — If you haven’t owned a principal home for the last three years you are eligible for this program. You are also eligible under this program if you have owned a home and your spouse hasn’t as together you qualify as first-time buyers. If you are a single parent or displaced homemaker, you make the eligibility cut under this program.
  • Financing — HUD doesn’t directly finance HUD homes and this is something you will have to keep in mind. Several government entities finance these homes which include VA loans with no down payment for veterans, USDA rural development loans which are for homes in rural areas, and FHA loans. Apart from this, you can also explore your options in the conventional lending market. However, conventional mortgages are difficult to obtain for certain HUD properties as HUD prohibits repairs before closing which private lenders stress upon.
  • Down Payment — Though the first-time homebuyers program allows you to own a home with zero down payment in certain cases, you must be prepared to make one. If you aren’t eligible for zero down payment properties, you will need to use your savings. Here, you must make sure you don’t use all your savings and park some of them for emergencies. If you need to wait a couple of more years, it would be a wise path to choose.
  • Credit Score — HUD program is meant for individuals who are looking for affordable housing and not for those who have a poor financial history. Your Credit Score would decide the amount of mortgage you qualify for and the kind of rates the lenders would charge. Hence, if you have sufficient time on your hand before you start looking for a HUD home, you must work towards improving your Credit Score.

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