First Homebuyers Assistance for Low Income Earners
First time home buyers who have limited income don’t have to give up on the idea of buying their first home. Anyone who is looking at purchasing a home needs to understand that there is a right way of going about it. Purchasing at the wrong time or borrowing more than you can handle can turn the dream of home ownership into a nightmare.
Below are things to consider to help get you in to your first home along with different programs to help with finances. It is just a matter of spending the time to save up an adequate deposit and doing the research to find the one that will work for you.
State First-Time Homebuyer Programs
Many states offer down payment or mortgage assistance to first time homebuyers. Here are different examples of financial assistance programs across the country. The Florida Housing’s First Time Homebuyer (FTHB) Program uses participating lenders to offer first mortgages to first time homebuyers. This program uses purchase price and buyer income to determine if the buyer is eligible. In Ohio, the applicant must meet income limits and the home must fall within price limitations and be in a target area. Texas has a program that assists with down payments. The Neighborhood Housing Services of New York City offers down payment and closing costs help.
The above are just a few examples of state based financial programs for low-income first time home buyers.
Educate Yourself
Learn what it takes to buy a home with a low income. The Neighborhood Housing Services of New York City offers an Online Homebuyer Education Course. The NYC course uses the site eHome America and can help you find the coursework applicable to your state. Additionally, using the eHomeAmerica web site can put you in touch with agencies within your state that may be able to provide assistance. For instance, in California, the Community Housing Development Corporation works with low income buyers, providing individual counseling and workshops. At the end of the CHDC program, the potential homeowner receives a certificate which is requirement for purchasing a HUD home.
Housing and Urban Development
One goal of HUD is to turn residents of public housing into homeowners. Public housing residents should contact their local public housing agency for details on how to do this. An example of a tool available to HUD is the loan insurance provided by the Federal Housing Authority, a part of HUD. With the FHA insuring your mortgage, a lender may be able to offer a lower down payment, reduced closing costs, and easier qualifying.
Learn more about HUD and Freddie Mac funding programs for low income earners here.
Work With Your Bank
If you have a long standing relationship with your bank or credit union, meet with the mortgage loan officer. They will have up-to-date information on local, state and federal programs that are meant for first time homebuyers, regardless of income levels.
Mind Your Credit Score
No matter what program you plan on applying for, or who you plan on speaking with, you must be sure to maintain a good credit history. Most programs have some requirement for a positive credit report. If you do not have a decent credit score, start restoring it and continue to save up a bigger deposit for your home as you improve your score. If you feel you may have a poor credit score, see how you can check your credit report for free and learn how to improve it here.
Help is definitely available for low income earners who would like the American dream of owning their own home. It will take effort finding the right program, filling out applications, meeting with counselors and, perhaps, repairing a poor credit report. But home ownership is not something you have to give up on, simply because your income is low.
