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First Time Home Buyers Programs - First Time Home buyers Programs and Grants

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Contrary to popular belief, there has never been a better time to buy a house than now. If you have never owned a house or other real property, first time home buyers programs can make the process even easier and more affordable. Houses are at an all-time low as it is. With a first time home buyer loan or grant, there is no reason to continue renting. Another fact that most people don’t realize is that even if they have owned a home in the past, they can still qualify for federal first time home buyer programs. The Department of Housing and Urban Development (HUD) defines a first time home buyer as anyone who has not owned real property for the past three years. If it has been longer than three years, you will still qualify. State programs may also be available but their offerings vary widely amongst themselves.

First time home buyer programs come in two different varieties. The first type is down payment assistant for those who may not have the cash available that a loan requires. In addition to government programs for down payment assistance, several grants and programs from charity organizations are available to help. All information on available charity assistance can be found at a HUD office or a state housing office. Some down payment assistance is free. Other forms of down payment assistance are repaid in monthly installments, but with no interest. Assistance can be dependent on several factors. Some of the factors are low income, no defaults on past government loans, no tax liens, no bankruptcies in the past two years, no unpaid child support, and no prior home foreclosures.

First time home buyer loans are the second type of assistance available from federal and state sources. The government recognizes that it can be difficult for many first time home buyers to get a home loan that is affordable in their current situation. They do know, however, that having a secure and stable domicile is an important step to becoming more financially viable.

First time home buyer loans usually allow for low down payments. In some situations, the down payment can be waived altogether. Fees that lenders are allowed to charge a first time home buyer are also limited, so up-front costs are reduced. In many situations, payments can be deferred in emergencies.

It is important for first time home buyers to understand that there are other restrictions placed on first time home buyer programs other than having to be a first time home buyer. Most of these programs limit the properties that are acceptable for the program. The limit usually revolves around a set dollar amount. In most situations, only lower-cost housing is eligible. These are need-based programs. If you earn $1 million per year, these programs cannot benefit you.

Another restriction is that the home purchased must be used as your primary domicile or residence. A first time home buyer loan cannot be used for property you are planning to rent out. Another restriction is that the home must be in good condition. There can be no safety issues or other factors that can potentially cause liability for the lender or the owner.

First time home buyer programs are not for everyone. Some lenders say that if you have good credit, a standard home loan provided by your bank is the best bet. Anyone with a credit score of 720 or greater is recommended to steer clear of the programs. Another disadvantage besides the fact that not every house will qualify is that most programs require a lock be placed on your ability to sell the house for a fixed period of time. If you sell the house before the period expires, you will lose the benefits that were provided by the program. This can mean that money must be repaid to the government in the form of recapture taxes. Additionally, first time home buyer loans are limited as to the type of loan that can be written up. In some instances, only 30-year fixed rate mortgages are available for first time home buyers.

For many people, first time home buyer programs are a valuable resource that allows them to buy a home they would not be able to get a loan for otherwise.

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