Marcus T. Wood, REALTOR® - BUYING YOUR FIRST HOME

purposes in the process of buying a house. Many of these programs offer loans that do not have to be repaid, a very helpful thing for a first-time homebuyer, or one who has all the elements of a successful homebuyer but needs down payment assistance. Given the lower requirements for down payment, FHA loans are a natural choice among the many down payment assistance programs that are available to help you on your way to buying a home, though they do have their own strengths and weaknesses. Most federal grants cater to the first-time homebuyer, and they are intended to help those individuals get started towards homeownership, but these grants should not be expected to cover a large percentage of the new home’s cost. Most cover less than 10% of the home’s value, or can be expected to only help pay for certain expenses such as closing costs. For example, down payment with an FHA loan is 3.5% of the cost of the home. Current FHA loan guidelines allow for the down payment portion of your home loan to come from several different places — a gift, personal savings, tax returns, and down payment assistance programs. Down payment assistance programs are funded at the city, county, and state levels, and due to this funding the assistance programs are ever-changing. Each program operates on its own budget, and operates with its own set of requirements. Credit score, income levels, and other factors will influence your eligibility for down payment assistance programs. Since homebuyer grants are meant to be used towards the purchase of a new home, there are qualifying rules for these funds. Generally, grants will not be given to anyone that cannot qualify for a mortgage. Finally, all federal grant programs aimed at first time homebuyers will require the individual to attend a HUD-approved house counseling class. These classes help to prepare individuals for

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