The Reality of First Time Home Buyer Programs in the U.S.

As a prospective home buyer, if you’re looking around for programs to aid you financially with your first home purchase, you might encounter some misconceptions surrounding these programs. To know for sure whether or not you’re an ideal candidate for a home buyer program, you must be familiar with what these programs really are and what they can offer you.

To begin with, it’s crucial to be acquainted with what first time home buyer programs are not. They’re not schemes to assist you in your home purchase if you have poor payment records. They are also not for you if you already have the funds to buy a home or if you have no funds of your own in the transaction.

That being said, let's look at what these programs can offer.

Nearly all programs intended for first-time home buyers are funded with grants from the U.S. Department of Housing and Urban Development. And because of that, they are targeted to low to moderate income home buyers. Though, the income conditions will vary from state to state and metro area to metro area.

The biggest misconception with these programs is that a borrower with bad credit can buy a home. While this may have been how things stood several years in the past, more or less every program on the market today will necessitate a credit score of 620 or higher. Most mortgages are basically made by private lenders (not the providers of the programs), and these lenders risk their loans not being insurable by the government or independent mortgage insurance agents if established credit underwriting practices are not followed. In the present economic environment, this risk is just not worth taking to lenders.

Now you might think whether you’re an ideal candidate for a home buyer program or not.

Well, if you have a good credit history and have some funds of your own to invest in the acquisition, then you’re more likely to pass for the program. You may also be required to have steady earnings with no more than 45% of your gross monthly earnings going to cover monthly debt settlements, including your prospective mortgage.

Home buyer programs can be a worthy supplement that helps an otherwise creditworthy buyer realize the dream of owning homes in major cities – for example, Peoria, Glendale, Litchfield Park and Buckeye homes, to name a few. Having said that, no lender or government agency wants to set up a buyer for failure or allow limited taxpayer funds on a borrower who has not exhibited the financial responsibility needed to own a home.

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Created on May 26th 2018 02:01. Viewed 523 times.

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