Buying a home remains a dream for many people in the US. According to a 2019 survey conducted by Realtor Magazine, 79% of respondents still believe that homeownership is a vital component of achieving the American dream.
Although the majority of the respondents gave homeownership a high rating, they admit to having a hard time achieving that dream. The same survey stated that about half of its respondents don’t own a home because they can’t afford it, or they have remaining debts to pay.
Fortunately, there are a variety of homeownership programs that can assist you. These programs cater mostly to first-time homebuyers, although some of them also target homeowners planning to trade up.
Remember that the terms of each homeownership program vary by state. For example, a down payment assistance program in Rio Grande Valley may not necessarily be the same for a similar program in Tallahassee.
Provided by the Federal Housing Administration, the FHA loan is the most common homeownership program for many American buyers. The organization offers mortgage insurance to lenders, allowing homebuyers to purchase a home with low down payments and credit score requirements.
The FHA loan also allows down payments to come in the form of gifts, making it possible for first-time homebuyers to purchase a house with little to no upfront fees. Eligibility for this loan requires a credit score of 580 or above.
Homebuyers who want to repair and renovate a cheap home can apply for the FHA 203(k) Rehabilitation Mortgage Insurance. The loan covers extensive renovations above $35,000, provided that the homebuyer hires an approved consultant, who will also serve as the contractor and project manager.
However, the FHA 203(k) loan requires a credit score of at least 640 and a down payment of at least 3.5% of the house’s purchase price. A homebuyer must also spend a minimum of $5,000 to be eligible.
Good Neighbor Next Door HUD Loan
Public service workers who need financial assistance for buying a home may apply for the Good Neighbor Next Door Loan by the Housing and Urban Development (HUD). Those eligible for this loan include:
- Emergency medical technicians
- Law enforcement officers
- Pre-kindergarten up to high school teachers
To receive the loan, eligible homeowners must agree to live in the property for at least three years as their sole residence. The home must also qualify as part of a HUD Revitalization Area.
Provided by the US Department of Agriculture, the USDA loan is an excellent choice if you want to live or relocate to a rural area. The loan can also be used to improve a property, whether through repair, renovation, or upgrade for energy efficiency.
To qualify for a USDA loan, you must have a credit score of at least 640. You can still apply if you don’t meet the minimum credit score, but the USDA will evaluate your credit history to decide if you’re eligible.
This homeownership program offered by the US Department of Veteran Affairs does not have any down payment or credit score requirements. However, only veterans and active service members of the military, as well as their spouses, can apply. The loan covers expenses for adapting a home for service-related disabilities.
If you’re struggling to save up for a house, consider looking at numerous homeownership programs offered by both private and public entities. Achieving your dream of owning a home with substantial cost savings is much closer than you think.