A Home For Every Family
There are number of different programs available for first-time homebuyers. Many people start the home buying process with one of these programs, or with a community organization. Below is a list of bank partner programs to look at before making your firstreal estate purchase.
Individual Development Account Program
Individual Development Accounts (IDAs) are matched savings accounts that enable low-income American families to save, build assets, and enter the financial mainstream. IDAs reward the monthly savings of working-poor families who are building towards purchasing an asset – most commonly buying their first home, paying for post-secondary education, or starting a small business. IDAs make it possible for low-income families to build the financial assets they need to achieve the American Dream.
The match incentive – similar to an employer match for 401(k) contributions – is provided through a variety of government and private sector sources. Organizations that operate IDA programs often couple the match incentive with financial literacy education, training to purchase their asset, and case management.
Homeowner Education Program
A Homeowner Education program helps people understand the process of buying a home. It offers information on topics like budgeting, finding a home, getting a loan, and maintaining a home. The Federal Housing Authority (FHA) also has a program you can participate in called the Homeowner Education Learning Program, or HELP. If you plan to get an IDA, you must complete one of these programs.
Government Loan Program
Loan officers can also identify a government loan program to help you, if you are eligible. Government loan programs are usually targeted to individuals and families with a modest income. These programs might have purchase price limitations, service charges, and higher loan origination fees. They also have one or more of the following characteristics:
- Zero or low down payment requirements. For example, some require a 3% down payment, and some require 5%, with 3% having to come from the borrower and 2% coming from other gifts or other grants.
- More flexible underwriting standards. This means the lender will consider non-traditional forms of proof of credit history, such as rent or utility payments, and higher ratios of debt compared to your income.
- Longer payment terms than standard mortgage loans. This results in a lower monthly payment.
