Homebuyer Assistance Programs - Money Smart CBI

FDIC Money Smart Your Own Home ? Study Aid for Adults

Homebuyer Assistance Programs

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First-time homebuyers can benefit from several programs. For example, in an Individual Development Account (IDA) program participating organizations match your savings contributions to help you save for a down payment or closing costs. You can learn more about IDA programs by taking the Pay Yourself First lesson.

Many cities and local governments offer homebuyer assistance programs, especially for people with lower incomes.

? Ask your lender and local government about the homebuyer assistance programs they offer.

? Ask local real estate agents about special programs.

Federal, state, and local governments offer many types of home loan programs. Federal Housing Administration (FHA) and Veteran Affairs (VA) are just a few of the many home loan programs offered by the Federal Government. Each home loan program has specific eligibility requirements and not everyone will be eligible. Benefits of these programs vary, but may include:

? Low down payment requirements ? More flexible underwriting standards in which the lender will consider non-traditional

forms of credit history (for example, rent or utility payments), and higher ratios of debt compared to your income ? Longer payment terms than typical mortgage loans

o Note: Your monthly payment will be lower, but the mortgage will take longer to repay and you will pay more in interest over the life of the loan.

? Homeowner education requirement o Homeowner education programs help you understand the home buying process, budgeting, finding a home, getting a loan, and maintaining a home. Many HUDapproved homeownership counseling agencies offer these classes.

Some restrictions to these programs may include purchase price limitations, service charges, and higher loan origination fees.

Also, talk to a Housing and Urban Development (HUD)-approved homeownership counseling agency for more information on home purchase and finance.

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