First Time Home Buyer

The program launched by California’s Governor reduces the interest rate on 30 year fixed mortgages to a below market rate. This is aimed to help the first time home buyer purchase targeted foreclosed homes in certain areas of California that has been hit hard by the foreclosure crisis. These homes are reduced to bargain prices to make them more attractive to the first time home buyer. First time home buyers purchasing a home to live in as their primary residence are eligible for the program. Additionally they must be a U.S. citizen or legal resident and meet the credit, income and loan requirements of the program.

The program is run by the California Housing Finance Agency. The program has estimated $200 million to aid from 800 to 1,000 families looking to buy homes. Income limits apply as couples are allowed to earn up to $67,800 in some counties and up to $73, 560 in others; the limits to qualify increase for families with three or more persons.

Certain credit requirements apply as well as borrowers must have a credit score of at least 660 for a loan up to 95 percent of the value of the home. For homes that exceed 95 percent of the homes value the credit score must be over 680 to qualify.

Not every foreclosed home in the specific areas of California is eligible for this program. Foreclosed homes that are selected by Fannie Mae, CitiMortgage, HomEq Servicing and Wells Fargo Premier Asset Services are the only homes eligible for this program. Additionally the homes must meet all CalHFA and Fannie Mae inspections, health and safety codes and repairs requirements to qualify. There are currently almost 100 homes that are on the list of eligibility now in the counties of Stanislaus, San Joaquin and Merced and more are being added every week. All of the homes listed are priced at least 12 percent below their estimated value helping the first time buyer reach the dream of homeownership.

Potential buyers must be aware that they are required to complete a home buyer education counseling program. These programs are available over the Internet, in person or over the phone; however, a certificate of completion must be issued through Fannie Mae or Freddie Mac identified counseling administration agencies, mortgage insures or HUD approved buyer counselors to be valid. The lenders themselves also are subject to certain requirements including being CalHFA approved lenders.

Despite the qualifications and requirements both the potential first time home buyer as well as the neighborhoods of the eligible homes are thrilled with the program. Buyers in need are being united with homes in need and offering revitalization for many neighborhoods in the counties that have been hit hard by the foreclosure crisis in California.

As the mortgage and real estate crisis continues to unfold, many state and counties are increasing the funding available to first time hoem buyers.

The Ohio Housing Finance Agency recently approved $6 million in additional funding for its mortgage assistance program for first time home buyers.

The program that received additional funding is called Second Mortgage Down Payment Loan Program. It assists families in the agency’s first-time home buyer program that need help obtaining home ownership. The agency provides funding for housing opportunities using federal and state funds and through partnerships with lenders throughout Ohio.

To date, more than 660 home buyers, or about 30 percent of participants in the first-time program, used a down payment loan to help buy a home. These statistics are current for the first five months of 2008.

The second mortgage loan program enables prospective first time home owners to receive up to 4 percent of a home’s purchase price as a 20-year mortgage, with a rate up to 2 percent above the first-time program rate. The plan can be combined with an initial mortgage through the first-time or Ohio Heroes programs.

The heroes program helps active military personnel, veterans, firefighters, health care workers, police officers and others receive 30-year, fixed-rate mortgages for a quarter percent lower than the first-time program. Since March, more than 550 Ohioans purchased homes through the program.

As requirements to qualify for a mortgage loan get more and more stringent with each passing month, an increasing number of first time home buyers are turning to state and county assistance programs.

Mortgages that allow consumers to put little if any money down when buying a home have mostly disappeared as a financing option available from private lending institutions. However, they are still available — and growing more popular — through government-backed programs.

The offers — which include “100% financing” — are possible due to down-payment assistance programs run by some nonprofit organizations. These programs are often funded largely by home builders and also by private homeowners who are eager to sell. The seller-funded groups provide enough down-payment money to buyers that they can qualify for a mortgage backed by the Federal Housing Administration, which requires at least a 3% down payment.