FIRST TIME HOME BUYERS

Definition First time home buyers are home buyers applying for mortgage financing who have not owned a home within the past 3 years.  So, both people who have never owned a home and people who have not owned a home within the most recent 3 year period are considered first time home buyers.

Financing There are a number of incentive programs available to assist first time home buyers with the purchase of their first home.   FHA, Fannie Mae My Community, and Freddie Mac Home Posssible are a few popular programs designed with some credit, income, and/or down payment flexibilities that assist first time home buyers overcome barriers to home ownership.  For military veterans there is the VA program that provide veterans with 100% financing for the purchase of a home.  Farmers Home, also known as Rural Development or Guaranteed Rural Housing program, also provides special financing for people buying a home in geographical areas designated by Federal Government as rural.  For more information please review brief descriptions of the programs below.

Credit Scores Credit scores are an important variable in qualifying for mortgage financing.  Currently most banks and mortgage lenders require a minimum of a 620 to 640 credit score to qualify for financing.  However, we are able to qualify you for a mortgage with a credit score as low as 530, with some other provisions.  We go the extra mile to help deserving borrowers qualify for financing.

FHA The FHA program is a government sponsored mortgage financing program.  Though FHA is not technically a first time buyer program, it is currently amongst the most used programs by first time home buyers to purchase their home.  The FHA program is available nationwide, although the maximum loan amount does vary and is limited by county.  The program requires a minimum down payment equal to 3.5% of the purchase price.  For example, to purchase a $100,000 home the down payment would be $3500.  Basic credit requirement is a clean payment history for the most recent 12 months.  We are able to qualify borrowers for financing with credit score as low as 530.  However, in the case that the credit score is less than 620 we'd want to see at least 3 open accounts on the credit report being paid on time for the most recent 12 months, no late payments or collections or judgments reported within the most recent 12 months, and we'd prefer to see that you'd have 2 to 3 months payment reserves left in your bank account after the closing on the purchase of your home.  Older collections, late payments, write offs, and other derogatory accounts can be disregarded and not be paid, at underwriter descretion, with a satisfactory letter of explanation.