Loans and Grants Programs for First-Time Homebuyers


    June is National Homeownership Month, and if you are a first-time homebuyer, the prospect of taking the leap and purchasing a new home can be a daunting one. That’s because the costs and fees that you can incur during the process can quickly add up (along with the mountains of paperwork). And most millennials still see saving for a down payment as the biggest obstacle in being able to realize their purchase.

    Luckily, there are many first-time homebuyer grants and programs that exist to help these individuals gain a financial foothold and move forward, with only highly-affordable down payments required.

    Here are 5 options that you might want to consider as a first-time homebuyer:

    FHA Loan
    The Federal Housing Administration (FHA) insures the mortgage with this option. FHA loans typically come with competitive interest rates, smaller down payment requirements, and lower costs than conventional loans. If you are approved based on credit score (580 or higher), you could be eligible for a mortgage with a down payment that’s as low as 3.5% of the purchase price of the home.

    CDA
    The CDA stands for Community Development Administration, and it was started in 1980 to help more Maryland residents own homes. Specifically tailored to first-time home buyers, CDA loans are very straightforward. With a CDA, you get a low fixed rate with terms up to 30 years, and they offer up to $10,000 in down payment and closing cost assistance.

    CHIP
    CHIP stands for Community Homeownership Incentive Program. This program allows eligible first-time buyers to put down as little as 3% (city down payment assistance available and minimum $500 borrower’s contribution required).

    USDA loan
    A lesser known loan program, the U.S. Department of Agriculture (USDA) offers homebuyer assistance focusing on residences in certain rural areas. Through this setup, the USDA guarantees the loan. There may be no down payment required, and the loan payments are fixed.

    VA loan
    The U.S. Department of Veterans Affairs (VA) helps service members, veterans, and surviving spouses purchase homes. VA loans offer competitive interest rates and require no down payment. You may not be required to pay for private mortgage insurance, and there isn’t a minimum credit score needed to be eligible.

    Fannie Mae or Freddie Mac
    Fannie Mae and Freddie Mac are government-sponsored entities. They work with local lenders to offer mortgage options that benefit low- and moderate-income families. With the backing of Fannie Mae and Freddie Mac, lenders can offer competitive interest rates and down payment amounts as low as 3% of the purchase price.

    So the dream of homeownership may be closer than you think. If you’ve been considering purchasing a home, but aren’t sure where to start or what you can afford, contact us today! Our buyer agents and lender partners can help you design your path to affordable homeownership. Whether it’s to explain financing options, provide tools to boost your credit score, or apply for your home loan, we are here to guide you through every step of the home buying process.

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