DES MOINES AREA FIRST-TIME HOMEBUYER PROGRAMS
FHA Home Loan - For this program, you need 3.5% down of your own funds for the downpayment, or it can be gifted by a family member. It has low monthly mortgage insurance, and the interest rates are very competitive with conventional mortgages. The new credit score requirements for FHA are 620 or above. U.S. government loan programs such as those of the Federal Housing Authority (FHA) are designed to promote home ownership for people who might not otherwise be able to qualify for a conventional loan. FHA loans have lower qualifying ratios than conventional loans, and usually require smaller down payments. Bear in mind, however, that FHA loans are not issued by the government; rather, the loans are made by private lenders. The mortgage limit for FHA in Des Moines is $271,050. Get more information about upcoming changes to FHA here, and/or contact me for more information. (Apply for this program)
ZERO Downpayment Programs - Instead of grouping the VA loan and the USDA loan separately, I'm putting them both under this category. Until 2 or 3 years ago, there were quite a few variations of zero down programs available. This is no longer the case, however. If you need to buy with no downpayment, you will probably have to either be a veteran and use the VA program, or, anyone can use the USDA program as long as they qualify under the income limits and buy in the areas the program is used. So, let's talk about both of these programs. First, VA: Zero down payment, loan amount up to $417,000. If you served during
wartime for at least 90 consecutive days or during peacetime for at
least 181 consecutive days then you are eligible for the VA Home Loan
Program. If you are currently on active duty then you are eligible for
the program after 90 days of active service. You are also eligible if
you are on Reserve, as long as you have served for at least six years,
which can be non-consecutive and in different branches of the Reserves.
The Reserve branches eligible for the VA Home Loan Program are Army
National Guard, Army Reserve, Air National Guard, Coast Guard Reserve,
Navy Reserve, and Marine Corps. Now, on to USDA: primarily used to help low-income individuals or households purchase
homes in rural areas. Funds can be used to build, repair, renovate or relocate a home, or
to purchase and prepare sites, including providing water and sewage facilities. Eligibility: Applicants for loans may have an income of up to 115% of the median income for
the area. Area income limits for this program are here (pdf file). Applicants must have reasonable credit histories. IMPORTANT: The income limits, housing limits, and available areas for this program vary widely. That's what I'm here for, though! To find out if you qualify for this program, simply contact me. (Apply for this program)
Iowa Finance Authority (IFA) - The Iowa Finance Authority (IFA) was established in 1975 to undertake programs to assist in the attainment of housing for low- and moderate-income Iowans. IFA can be helpful if you require assistance with downpayment or closing costs. IFA’s FirstHome Plus grant may provide cash assistance of up to $2,500 to help eligible borrowers with closing costs, down payment or minor repairs. The grant must be used in conjunction with the FirstHome program. A borrower's annual household income must not exceed $49,600. Benefits of IFA: The interest rate for FirstHome and FirstHome Plus loans usually cost less than the market rate mortgage and have a fixed interest rate for 30 years. Also, home mortgages financed with FirstHome or FirstHome Plus may require a very low down payment or no down payment at all, and may they be conventional loans or loans backed by the federal government. The IFA loans do have a 9 year recapture period on them, so if you were to sell or refinance in 9 years you can be charged for that. The charge is based on what they make at the time as a household income and their equity. Is this the best loan for you? Well, the easiest way to find out is to contact me, and I'll be happy to give you more information about IFA and answer all of your questions. (Apply for this program)
NFC home loan (aka Neighborhood Finance) - This
is one of the most popular loan programs in Des Moines. Their home
loan has no private mortgage insurance. The NFC Advantage: Up to $12,500 in
subsidies you may not have to repay!
When you qualify for an NFC loan, you'll receive a subsidy of up to
$10,000 to help pay for property repairs and improvements. Eligible home buyers also receive a subsidy
up to $2,500 to assist with down payment and/or closing costs. However, the home must be in one of their targeted
neighborhoods. Click here for a printable map of their targeted neighborhoods, or click here for a highly detailed map of their targeted neighborhoods. Because these subsidies are paired with your NFC
loan, you can do more than if you obtained a traditional loan elsewhere. Please note that you MUST get your purchase loan
through NFC to be eligible to get up to the full $10,000 forgivable. You CANNOT
get your loan to purchase your home through another lender and then come to NFC
for only the $10,000 forgivable. NFC's forgivable loans are only for those who
get their loan to be repaid through NFC. Questions? Contact me!
Conventional Home Loan Programs - A conventional loan is
simply a loan offered by a traditional private lender. They may be
fixed-rate, adjustable, hybrid or other types. While conventional loans
may be harder to qualify for than government-backed loans, they often
require less paperwork and typically do not have a maximum allowable
amount. They usually require at least 5% downpayment.
The My Community Iowa First Time Home Buyer Program - This program opens doors for a Fireman, Police Officer, Paramedic, Teacher, Healthcare Worker such as Nurse, and Military Personnel. This program features 3% down financing and you receive a $500 credit toward closing costs. Also, you can have use part-time or overtime income from last 12 months to qualify. Contact me if you have questions about this program.
Homesteps Program - Here's information on their CURRENT program, which is subject to change: Introducing SmartBuy, an exciting nationwide purchase program
brought to you by HomeSteps (Freddie Mac). As a potential homebuyer you
may be wondering, what makes a HomeSteps home a SmartBuy? Start with the 2-year, HomeProtect® Home Warranty offered on HomeSteps homes. Add to that, for a limited time, our up to 3.5%* Buyer's Closing Cost offer! And know that HomeSteps homes are priced at fair market value. All add up to a SmartBuy. As part of the SmartBuy purchase program, HomeSteps is offering: Two-year HomeProtect Home Warranty; Up to a 3.5%* Buyer's Closing Cost offer (must be submitted upon initial offer); HomeProtect Appliance Discount (up to 30% savings on appliances). Now, no matter where you live in the United States, owning your own
home may be more affordable than you think! If you currently rent or
are considering homeownership, now is the time to make a SmartBuy. The
HomeSteps SmartBuy purchase program may help you on your way to
homeownership, with a little added peace of mind. This home purchase program is brought to you by HomeSteps
(Freddie Mac) and helps make your purchase of a HomeSteps home a truly
smart buy. Close on a qualifying HomeSteps® home before March 26, 2010, and receive a two-year HomeProtect®
Home Warranty from a respected third party warranty company, up to 3.5%
for borrower's closing costs, and a HomeProtect appliance discount of
up to 30% on household appliances. Restrictions apply. (The above information is straight from Homesteps, and I will update this information as soon as they do.) There is absolutely no way to put all the information about this program here. Please contact me for more information.
FHA 203(k) Rehab Program - The short version is, this is the loan that addresses a question that I get asked a lot: "Can I buy the home and get money back for repairs?" Yes, if you qualify for the FHA 203k Program. Now here's the long version: Most mortgage financing plans provide only permanent financing. That is, the lender will not usually close the loan and release the mortgage proceeds unless the condition and value of the property provide adequate loan security. When rehabilitation is involved, this means that a lender typically requires the improvements to be finished before a long-term mortgage is made. When a homebuyer wants to purchase a house in need of repair or modernization, the homebuyer usually has to obtain financing first to purchase the dwelling; additional financing to do the rehabilitation construction; and a permanent mortgage when the work is completed to pay off the interim loans with a permanent mortgage. Often the interim financing (the acquisition and construction loans) involves relatively high interest rates and construction relatively short amortization periods. The Section 203(k) program was designed to address this situation. The borrower can get just one mortgage loan, at a long-term fixed (or adjustable) rate, to finance both the acquisition and the rehabilitation of the property. To provide funds for the rehabilitation, the mortgage amount is based on the projected value of the property with the work completed, taking into account the cost of the work. As above, there is absolutely no way to put all the information about this program here. Please contact me for more information.
Last, What About Closing Costs? - There are two big "chunks of money", so to speak, that buyers have to bring to closing when they buy a home: the downpayment, and the closing costs. If you get a zero down home loan, of course that lets you out of the downpayment, though, as I wrote above, they are harder to get these days. However, you always have to pay the closing costs. Or do you? Let me tell you how I work things so that you actually don't have to pay closing costs...! I will zealously negotiate for you and will write in the offer for the seller to pay your closing costs. So, how do you know the seller will pay them? Because it doesn't really matter to the seller if they pay your costs. All they care about is their bottom line. Here's a simple example: Let's say you want to buy a home listed at $100,000, and you and I are mind-readers, so we know that they will take $97,000. And let's say your closing costs are exactly $2500 (a typical amount, depending on your price range). With me so far? What you and I would do is write an offer for $99,500, and put in the offer that the seller is to pay $2500 towards the buyer's closing costs. That leaves the seller with $97,000.Now, remember this is a very simplistic example, and that I will be negotiating the best price I can for you. But this hopefully gives you some idea of how this part of the process works.
PAGE DISCLAIMER: Please note that these programs are subject to change. I'm a real estate agent, not a loan officer -- but with this webpage, I am simply trying to familiarize you with some first time home buyer programs in the Des Moines and surrounding areas. Please contact me for more information on these programs, or, simply post below.
Questions? Contact me at mike@mikedavishomes.com or 515.259.1078.
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