Homeownership remains the American Dream for many people. But no matter how hard they try, that dream seems to remain just out of reach. Today’s economic climate makes it difficult to afford monthly mortgage payments and/or save up for a down payment, and there are those potential home buyers who have a less-that-sterling credit score. Despite the difficulties, realizing the dream is still possible – if you know where to look for assistance. Check out these 3 lesser-known programs providing assistance to Atlanta home buyers.
1. FHA 203(k) Loan
Most home buyers have heard about FHA loans, often the go-to program for first-time buyers. FHA loans are so popular because they are backed by the federal government, which provides lenders protection in the case of borrower default. The upshot is that with this protection lenders have lower eligibility requirements for FHA loans – typically lower down-payment and credit-score requirements.
What many [market-city] home buyers aren’t aware of, though, is the FHA 203(k) loan. This can be a great assistance program for buyers who want to purchase a fixer-upper. It works like this . . .
The lender calculates the property’s after-repair value, and then the loan bundles the costs of purchasing and renovating the property. But if the property requires extensive renovations – that is, renovations totaling more than $35,000 – then the borrower is required to hire an approved consultant who can serve as contractor and project manager.
An FHA 203(k) loan is typically a good fit for home buyers who have the time and skills to take on a fixer-upper project and who want to gain instant equity. They can buy a home in need of repairs at much lower cost and then use a portion of the loan to pay for the repairs and renovations. This type of loan is also a good option for buyers who want to customize a home to suit their individual tastes and preferences.
Typically, qualifying for one of these loans requires a credit score of at least 640 and a down payment of 3.5%. In addition, the property must be in need of a minimum of $5,000 in repair/renovation costs. If you are interested in an FHA 203(k) loan, be sure to consult a Atlanta agent at (404) 977-5054 to find out what the repair costs will be for the home you’re interested in.
2. Good Neighbor Next Door HUD Loan
Maybe one of the least-known programs providing assistance to Atlanta home buyers is the Good Neighbor Next Door HUD Loan for public service workers. A public service worker who can qualify for the Good Neighbor Next Door program will be able to purchase a home at half the list price.
The Department of Urban Housing Development (HUD) implemented this program to achieve three goals in certain areas: revitalizing neighborhoods, making communities safer, and promoting home ownership. And a purchase at half list price is an excellent incentive for home buyers.
Eligible public service workers include pre-kindergarten through 12th-grade teachers, law enforcement officers, firefighters, and EMTs. Eligibility also includes a commitment to live in the home as the sole residence for a minimum of 36 months.
3. Forgivable Mortgage
Another of the lesser-known programs providing assistance to Atlanta home buyers is the forgivable mortgage. This is a loan to cover the down payment, and, as the name suggests, the loan is forgiven/erased when the borrower has met certain time-based conditions.
Here’s how such a forgivable mortgage works. Suppose, for example, a first-time buyer borrows $15,000 for a down payment. If the buyer lives in the home for five years and has made mortgage payments as agreed, the lender will write off the $15,000 loan for the down payment. No payments will have to be made, no interest is due, and the loan is forgiven and the lien removed from the title.
Forgivable mortgages are favored by communities and municipal governments because they tend to promote long-term home ownership, as well as fostering neighborhood involvement and community investment.
The Next Step for Atlanta Home Buyers
So, yes, in addition to the more well known assistance programs, there are some lesser-known programs providing assistance to Atlanta home buyers. And that means home ownership is possible. But buyers need to be aware of these programs and how they function in the local market. And that’s where a Atlanta agent comes in – to provide the assistance you need. If you’re one of the Atlanta home buyers looking to realize the American Dream, contact us today at (404) 977-5054.