Statistics show that nearly 80% of people who live on rent want to buy their own home, but most of them can’t afford to do so. Mortgage rates are skyrocketing and property listings are gaining value by each passing day making it very difficult for applicants to secure a sizeable loan or even afford to pay for the downpayment.
The following financial grants and programs, however, are a blessing in disguise giving you the opportunity to buy your very first home.
- Federal Housing Loan (FHA)
FHA loans are available for the first time home buyers offering competitive interest rates, manageable down payments, and more importantly lower closing costs. Closing cost is one of the major expenses when you borrow conventionally, making FHA loans a popular alternative. FHA loans are also easy to avail with a credit score of 580 or higher wherein you can make a downpayment of just 3.5% approximately of the purchase price.
- U.S. Department of Agriculture loans (USDA)
A home loan can be availed by nonagricultural applicants with the homebuyers assistance program sponsored by the USDA. There is no downpayment required in many cases if you have a credit score of 640 or higher. The loan payments are fixed and there are certain income limitations that will vary depending on the region where you plan to apply for a loan.
- Native American Direct Loan
There are two benefits of availing the loan available only for Native Veterans; no down payment needed and no need for private mortgage insurance. The loan can be availed for a period of 30 years with low closing costs and a fixed installment to be paid every month.
- Veterans Affair loan (VA)
U.S. military veterans can make the most of the first time home buyer Veterans affair loan. Veteran members who are on active duty or their spouses are eligible to apply for the loan. Similar to Native American Veteran loans, VA applicants do have to pay for private mortgage insurance and they can avail competitive interest rates. Most importantly there is no down payment required to secure the loan.
- FHA Section 203(k) loan
The section 203(k) rehabilitation program will allow first time home buyers to afford homes that are in need of renovation and a makeover. The cost of the improvements will be included in the total amount of mortgage or funds that need to be borrowed. The downpayment for this loan will be around 3% of the list price.