Nearly every state and many cities have housing agencies with programs designed to help first-time homebuyers get into a home. State and local mortgages: You can get a wealth of information on your state and local programs by going to www.hud.gov/ local/index.cfm.
State housing authorities sell bonds to raise funds for their loan programs that offer mortgages 1 to 3 percent less than the going market rate. These programs range from down payment grants and loans to lower than market interest rates.
Most combine grants with FHA or VA loans to lower the down payment and closing costs.
However, there are restrictions to these loans you should be aware of, so it’s important to read the fine print. Typically, you must live in the property, and if you move or get transferred, you can’t rent it. Also, the down payment subsidy isn’t completely forgiven until you’ve lived in the house for three to five years, depending on the program. If you want to sell before the date in
your contract, you may have to pay back part of the grant.
Depending on the area and program, if you’re blessed with a hot market and you want to sell for a profit, the housing authority may want some of the subsidy back. Still, if you have little or no money down, one of these programs can be a good way to go. It’s certainly better than renting, but be sure you understand the strings attached.
State housing authorities sell bonds to raise funds for their loan programs that offer mortgages 1 to 3 percent less than the going market rate. These programs range from down payment grants and loans to lower than market interest rates.
Most combine grants with FHA or VA loans to lower the down payment and closing costs.
However, there are restrictions to these loans you should be aware of, so it’s important to read the fine print. Typically, you must live in the property, and if you move or get transferred, you can’t rent it. Also, the down payment subsidy isn’t completely forgiven until you’ve lived in the house for three to five years, depending on the program. If you want to sell before the date in
your contract, you may have to pay back part of the grant.
Depending on the area and program, if you’re blessed with a hot market and you want to sell for a profit, the housing authority may want some of the subsidy back. Still, if you have little or no money down, one of these programs can be a good way to go. It’s certainly better than renting, but be sure you understand the strings attached.
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