Learn About First-Time Homebuyer Programs

First-time homebuyers have programs available for them to purchase a home.

Buying a house is expensive, which is why government programs offer financial assistance. This allows first-time buyers not to stress about money when trying to purchase a home. Also, it gives Section 8 recipients the ability to purchase a home they never thought they could afford. Each program has certain requirements applicants must meet, such as age, occupation, income and even a background check. Additionally, there are a variety of national programs to make home buying easier for first-time homeowners, but availability may ultimately vary by state. For instance, the Indian Home Loan Guarantee Program is not available to you if you live in Georgia, while the program does have housing opportunities for individuals who live in Florida. Learn more about the different first-time homebuyer programs available, and which programs you are eligible to join.

About Special Home Buying Programs

At the national level, there are special home buying programs available for applicants. Each program has different requirements to join and offers a variety of benefits. Although housing programs and housing grants are available in different locations throughout the country, not all states may offer the program you want to become a part of. 

About the Good Neighbor Next Door Program

The U.S. Department of Housing and Urban Development (HUD) created the Good Neighbor Next Door (GNND) program to provide individuals the opportunity to purchase a home. If you have one of the following occupations, you are eligible to join GNND:

  • Law enforcement officer
  • Elementary, middle or high school teacher
  • Firefighter
  • Emergency medical technician

By being a part of GNND, you will receive a 50 percent discount from the listed price of available homes in your area. However, you must live on the property as your primary residence for 36 months . If you are unable to commit to the requirement, you cannot purchase a home through that home buying program.

Additionally, not all states will have HUD homes available for GNND participates to join. Housing is limited, and the state you live in may not have homes available at the time of your search. However, when housing does become available, you have seven days to make an offer. You and other applicants can make a proposal for a home. Once the seven-day period has ended, a lottery will occur to decide which individual or family’s offer was accepted. 

Learn About Federal Housing Administration Loans

The Federal Housing Administration (FHA) provides new home buyers the opportunity to receive financial assistance. The loan is for applicants with low-to-moderate incomes. It allows individuals who are unable to make a large down payment on a home to still be able to purchase property. Also, applicants can have a credit score as low as 500 and still have the opportunity to receive a loan with a down payment of 10 percent. If your credit score is higher than 580, you can take an FHA loan with a 3.5 percent down payment. This is because the administration insures the loans of eligible first-time property buyers to protect lenders against potential defaults. 

Also, you can use your home loan to increase the energy efficiency of your home. The costs if energy improvements can be included in your FHA Energy-Efficient Mortgage. To make improvements to your home, a home energy assessor must make the suggestion. Improvements can include energy-saving equipment, as well as active and passive solar technologies. 

Learn About the Indian Home Loan Guarantee Program

The Indian Home Loan Guarantee Program (Section 184) is a mortgage program specifically for American Indians, tribes, Alaska Native families, Alaska villages and tribally designated housing entities. Eligible applicants to this program have the opportunity of receiving down payment assistance. Individuals can receive a loan greater than $50,000 at 2.25 percent interest, or less than $50,000 at 1.25 percent. Also, with the loan, families must use the money to:

  • Buy an already built home.
  • Construct a new house.
  • Purchase and rehabilitate a home. 
  • Refinance a house.

Furthermore, the program is continuing to expand since it first became a part of HUD in 1992. The program now has more eligible areas that are beyond tribal trust lands. There are many states that accept Section 184 loans. However, there are 12 territories that are currently not participating in the program:

  • Arkansas
  • Delaware
  • District of Columbia
  • Georgia
  • Kentucky
  • Maryland
  • New Hampshire
  • New Jersey
  • Ohio
  • Pennsylvania
  • Tennessee
  • Vermont
  • West Virginia

If you live in one of the states listed above and are interested in receiving Section 184 loans, you will not be able to do so. 

About Public Housing Ownership (Section 32)

The Public Housing Ownership (Section 32) program offers public housing agencies (PHA) a way to sell housing units to low-income families. The government housing assistance program helps families purchase homes through an arrangement that benefits both the buyer and the PHA. Section 32 gives the homebuyers access to an affordable homeownership opportunity. Meanwhile, PHAs can retain and reuse the profit of the sales and funds they receive from Section 32 for the following:

  • Operate a lease-purchase program.
  • Sell public housing rental units to eligible homebuyers.
  • Provide funds to public housing residents or other low-income families in the forms of:
    • Down payment or closing cost assistance.
    • Subordinate mortgages.
    • Help purchasing or maintaining property that will be for sale.

For you to be eligible for the government housing program, you cannot exceed 80 percent of the family income in your local area. Also, if you currently live in a PHA and are a part of the Section 32 program, you have an advantage. If the PHA is selling a public housing unit under the homeownership program, the PHA must offer the house to you if you currently live in the unit. If you do not accept the offer, the PHA must give you a 90-day notice prior to the date of the sale of the unit. Additionally, the PHA needs to provide you with counseling, relocation expenses and comparable replacement housing options to help you find a new home for you and your family to live in.