The U.S. has plenty of programs and incentives that could make the goal of owning a home a reality. If you’re a first time buyer, and even if you’re not, there are some government benefits that can help you afford a new home.
Here are some options that can make a move more affordable :
Various HUD-funded programs
The people at HUD grant money to a myriad of different organizations and services that can help first-timers purchase a home. From loan programs that offer lower down payments to special programs for teachers, firefighters and a few other vocations, HUD’s resources are vast and diverse. HUD even offers federal assistance at the state level, so make sure to see if your state is covered.
State-specific assistance
In addition to HUD assistance, states such as Illinois, Ohio and Washington have down payment assistance programs for first time buyers. Eligibility criteria vary by state, but often factor in your income and the value of the property you’re hoping to purchase. If you qualify, you could score financial assistance with down payment and closing costs. You might also net some monetary relief to rehab or improve a property.
Military benefits
Active-duty and veteran families might be eligible for a zero down payment Veteran Affairs home loan. It’s part of a benefit program that’s helped million of veterans and military members purchase a home since World War II. While loans typically top out at $417,000, that limit can swell in counties with higher costs of living. Not only do these loans allow borrowers to sidestep down payments, service personnel can also roll the mortgage insurance of 2.15 points into the loan. More and more veterans are using these flexible, $0 down loans to crack the housing market during a time of tight credit and limping wages.
Loans for Native Americans
Native American first time buyers can apply for a Section 184 loan, which lets them buy a home with as little as a 2.25% down payment on loans of $50,000 and more. If you need a loan for less, the down payment dips to 1.24% Unlike traditional loan approvals that are heavily dependent on a borrower’s credit score, these hinge on the prevailing market rate. There is a small catch : Section 184 loans are applicable only to single-family homes that are for a primary residence.
Your retirement fund
That trusty tool you’re using to fund your golden years can help put a new roof over your head while you’re still young. First time buyers can pull up to $10,000 during their lifetime from their traditional or Roth IRA without being whacked with the 10% early withdrawal penalty. However, Uncle Sam might come knocking with his hand out. Pull money out of a traditional IRA and expect to shell out some money to cover the income tax on the money. Roth IRAs aren’t subject to income tax because they’re funded with post-tax dough. Of course, like any government agency, HUD and its local municipality siblings are often tweaking, adding and dropping funding options. So before signing on a purchase offer’s dotted line, make sure you investigate eligibility and availability in your area to make homeownership a tad more affordable.
