Down payments, fees for assessment and inspection, closing costs and qualifying for a mortgage – all these things can make you think that buying a home is beyond your reach. However, you may be able to realize your dream because there are numerous first time home buyer programs in Tampa Florida for first – time buyers. These programs are designed to help first – time home buyers, even those with shaky credit scores, with low to moderate income. There are also programs to assist first – time buyers in some professions, such as the military, law enforcement, and education. So let’s look at it.
first time home buyer programs
Many people don’t know the U.S. Agriculture Department (USDA) guarantees loans for some rural homes that meet their criteria, including the possibility of 100% funding. And, no, you don’t need to start farming or cattle raising – you just need to buy a home in an eligible area.
There are income limits for these loans so that not everyone can qualify. They are based on income for individuals with low to moderate incomes for that particular area. You will typically have to have a credit score of 640 or better to qualify for a streamlined loan from the USDA. You may still be in the running if your score is below that. To verify your payment history, you will only need to provide more documentation and proof.
The Federal Housing Administration (FHA) loan is another important program for first-time buyers in Tampa Florida. These loans are primarily intended to assist people who simply do not have the cash ready for a heavy down payment and/or who have a less than great credit record. So a loan from FHA is often a great option if you only have a small down payment and a lower credit score. The standard for FHA loans is a 3.5% down payment with a minimum score of 580 and 10% with a score ranging from 500 to 579.
You must be aware that you will have to pay for private mortgage insurance (PMI) with this lower down payment, usually paying an upfront premium together with annual premiums. In case the borrower defaults on the loan, PMI’s purpose is to protect the lender. Nevertheless, it offers a way to buy a home for many who don’t have a bunch of cash for an down payment.
The U.S. Veterans Affairs Department (VA) provides home loans to many U.S. military members, both active duty and veterans. So if you’re military, this is definitely one of the first-time buyers ‘ programs to look into as these loans often come with no down payment and low interest rates.
Although there is a funding fee for VA loans, it can be rolled into the cost of loans, and some military members may be exempt. Moreover, such loans do not require you to carry PMI, and usually there is no minimum requirement for credit score. And if you struggle to make mortgage payments, the VA can work with the lender to make things smooth.
Fannie Mae and Freddie Mac
These might be funny names, but they’re good programs in Tampa Florida for first-time buyers. Fannie Mae and Freddy Mac are government-sponsored entities aimed at maintaining a strong US mortgage market. They are then called government-sponsored enterprises (GSEs), buying some loans from conventional lenders on what is called the “secondary mortgage market.”
Both Fannie Mae and Freddy Mac require a minimum down payment of 3 percent and a minimum credit score of 620. (The exact score depends on the lender in question.) You’ll also need a fairly spotless credit and payment history, such as a history of paying bills on time. The really good news is that Fannie Mae will accept a debt-to-income ratio of up to 50%, which is much higher than the 36% standard. You’re going to have to pay for PMI because you pay less than 20 percent down.
So you can really realize your dream of owning your own home with these first – time buyer programs in Tampa Florida. However, if you are not qualified for any of these programs, there are still options available.