First Time Buyers Look to Tap Alternate Funding Avenues

First Time Buyers Look to Tap Alternate Funding Avenues

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In an improving residential real estate market, first time buyers may flinch at the greater loan amounts that accompany larger price tags. ­Lending standards have also put some first time buyers through a tougher gauntlet than faced during many previous eras. ­Although some easing is now beginning to take place, some Mecosta County first time buyers can still find it difficult to secure the level of funding they seek. ­For them, there are a number of alternative funding possibilities that first time home buyers in Mecosta County may wish to explore. ­Here are some of the assistance programs that can serve buyers as they go about buying that first home:

The U.S. Department of Veterans Affairs (VA) Home Loan Guaranty Service is the most well-known of the programs, providing government guarantees for loans to service veterans and those on active or reserve­duty. ­It also provides assistance to widows or widowers of veterans. ­Some VA loans require no deposit, and although the size of loans are limited and vary by area, the limits aim to make possible purchase of a mid-sized home. ­The actual loans are made by private lenders; the portion that is guaranteed by the VA protects the lender from losses should the veteran prove unable to repay the loan.

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The HUD Basic Home Mortgage Loan 203(b) is a program that provides mortgage insurance to purchase or refinance one-to-four unit principal residences. ­Applicants who meet standard FHA credit standards and who pay the insurance premiums are eligible for approximately 96.5% financing provided by FHA-approved lenders. ­

The USDA Rural Development Single Family Housing Guaranteed Loan Program is a rural development grant designed to help low- and moderate-income rural applicants purchase a home. ­The rural development program works with local lenders to provide 100% financing for eligible home buyers. ­In order to qualify for the program, an applicant must live within one of the eligible rural areas and have a total household income that does not exceed the established limits for that area. ­

The Community Development Block Grant is one of the nation’s oldest housing assistance programs. ­The goal of the CDBG is to make funds available to urban communities to be disbursed to citizens in the low and moderate income range. ­The money allocated to the CDBG is provided to local government authorities, who have broad latitude in how they allocate the funds to create and upgrade local housing conditions. ­Examples are shown in the video Role of the CDBG.

Each program has its own specific application format, which may involve completing a grant application package or simply applying for a loan from an approved lender. ­More detailed information can be found on each relevant agency’s website. ­

Securing financing is just one step of the home-buying process — though a first time buyer may be excused if they find it an intimidating one. ­Whether you are a first time buyer in Mecosta County or a seasoned homeowner, give me a call: I’m here to help every step of the way!

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Terry Reeves

Terry Reeves

Real Estate Professional
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