So, now that we have determined what we think we can afford to pay monthly it is time to find where all this money is going to come from.
There are plenty of options for first time home buyers as far as financing goes.
The best thing I found through my fashionable minimalistic research skills were the programs that most states have to help first time home buyers with financing options.
You can gain more detailed knowledge of all of this from a buyer’s agent.
There are educational courses that most states provide for low-cost or even FREE!
Ah! My new favorite word!
These programs give you tons of information on resources in your area and ideas for down payment assistance.
There are also low-income buying programs like Fannie Mae, Freddie Mac, HUD, FHA, RHA.
Fannie Mae stands for Federal National Mortgage Assistance. It was created by Congress in 1938. The purpose was to provide financial services and options for low- to mid-income families who wouldn’t otherwise be able to qualify for a home.
Freddie Mac stands for Federal Home Loan Mortgage Corporation. It was chartered by Congress in 1970. Freddie Mac purchases residential mortgage loans and resells them to investors on Wall Street.
I bet that last phrase freaked you out as much as it did to me when I read about it. Investors on Wall Street in times like these? Freddie Mac actually increases the availability and affordability of loans by doing this.
Availability and affordability? I’m in.
The HUD is a program I have heard many positive things about for first time home buyers. It is The US Department of Housing and Urban Development. Their mission is to create strong communities and affordable homes for everyone.
Many buyer’s agents specialize in working with people buying HUD homes.
Asking if the buyer’s agent does specialize in HUD homes before you work with them is an excellent idea if a HUD home is what you want.
The FHA insured loan is a Federal Housing Administration mortage insurance backed loan that has been afforded by FHA-approved lenders. These loans do fall under the category of federal assistance. Over time they have helped Americans who have lower incomes to obtain loans to buy a home they would not be able to afford without the borrowed money. This program was started during the Great Depression in the 30s as a source of decent insurance when foreclosures and defaults on loans were high. Now it basically just helps people out who can’t afford a regular down payment and doesn’t qualify for private mortgage insurance.
I wonder if the government is going to create another loan assistance program anytime soon?
The RHA (Rural Housing Authority) makes direct loans to buyers and guarantee regular commercial loans for home buyers in rural areas in an attempt to improve the quality of life in these areas.
The list goes on and on. It was amazing how much information I found on my own for first time home buyers financing.
What do you think the best first time home buyer financing option is?
I think I am going to need a more qualified professional to help me sort through the list….
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