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How to Get Help Buying a Home in the U.S.

November 16, 2021
Concept of family sitting on floor of a new home with moving boxes

Buying a home’s a big deal. If you’re a first-time homebuyer, it might be the biggest investment you’ve made in your lifetime.

Signing on the dotted line for a new home may seem like a challenge. When it’s your first home purchase, you may need help buying a house.

There are programs, resources, and techniques for financing a house. With a little research about how to get help buying a house and by comparing your options, you may put owning a new home within your reach. Check out the following programs to help you buy a house.

U.S. Government Programs for Purchasing a Home

The Department of Housing and Urban Development has several federal programs for first-time homebuyers. There are also some good things to know about the financing process before you begin shopping for a home.

When you apply for a home loan, ask about your options. A good program can influence what type of home you can buy and where. Following are some federal homebuying programs to consider.

FHA Loans for First-Time Homebuyers

The Federal Housing Administration makes home loans available for borrowers who are purchasing their first home. With FHA loans, down payment requirements are as low as 3.5% of the home purchase price. It is also typically easier to qualify for FHA loans with lower credit scores than what other loans may require.

Homeowner Voucher Program

The Homeowner Voucher Program is available to low-income homebuyers who are purchasing their first home. You may be eligible if you meet a minimum income requirement, have at least one adult working full-time for at least one year, and you complete a housing counseling and homeownership program.

Programs for Service Members and Veterans

There are home loan programs from the Department of Veterans Affairs for veterans and active duty service members. There are also programs specifically for Native American veterans through the Native American Direct Loan program.

Section 184 Indian Home Loan Guarantee Program

The Section 184 Indian Home Loan Guarantee Program is a home loan product for American Indians and Alaskan Native families, Alaska tribes and villages and tribally designated housing entities. This mortgage program guarantees home loans made to these native borrowers.

USDA Rural Development Home Loans

The U.S. Department of Agriculture Rural Development offers home loan programs with low down-payment requirements specifically for homes in designated rural areas. You can check with your state’s office to see what’s available.

U.S. State and Local Homebuying Programs

In addition to federal homebuyer programs, your state HUD office or state housing finance agency may have special state programs. Check out HUD’s collection of homebuying resources for individuals for additional local homebuying resource directories.

How to Get Help with a Home Loan

Conventional home loans typically require a down payment of 20% of a home’s purchase price. There are options for lower down payments. You might consider the following for help toward paying a down payment and getting a home loan.

Down Payment Assistance Programs

Down Payment Resource tracks approximately 2,300 homeownership programs that provide down payment assistance to both first-time and repeat homebuyers. State housing finance agencies and other sources (cities, counties and nonprofits, for example) may offer down payment assistance programs you can use in combination with a mortgage. These include: 

  • Grants. Grants are a form of gift aid that you do not have to pay back.
  • Zero-interest loans. Some zero-interest loans are forgiven over a specified time frame. For example, in some cases, as long as the borrower still owns and lives in the home once the period is over, the money doesn’t have to be repaid. With zero-interest deferred-payment loans, borrowers may not have to make payments on the down payment and closing costs of a loan until certain terms are met These terms might include when the home is sold or the mortgage reaches the end of the term.
  • Low-interest loans. Low-interest loans can help you get funds for your down payment and pay off what you owe with low-interest repayments over multiple years.

Your home loan officer can help find low down payment resources for you. To be eligible for down payment assistance, you’ll typically need to:

  • Meet certain income limits
  • Purchase a home in an approved location
  • Contribute a certain amount of money toward the purchase.
  • You may also be required to take a homebuyer education course

Improve Your Credit Score for a Home Loan

If you’re applying for a home loan, a lender will look at your credit score to determine your rates and how much you’re eligible to borrow. Boosting your credit score could help you get better home loan terms.

To try to fix your credit to buy a house, you can follow these guidelines:

  • Monitor your financial ratios. Aim for a credit utilization ratio of no more than 30%.
  • Make on-time payments. Pay at least the minimum amount due on time. If possible, aim to pay off your balances early.
  • Diversify your credit. Maintain a diverse collection of open credit accounts if possible.
  • Build a solid credit history. Use Experian Boost if you have a thin credit file. It will factor in banking history and utility payment data to possibly boost your credit score.
  • Avoid opening or closing accounts. Taking actions like these can temporarily decrease your credit score.

The best strategy to improve your credit score is to keep your current accounts open and lower your credit utilization by paying off what you owe, in full, as soon as possible.

Browse New Home Options

Newly built homes and building a home are options that are open to more people at different income levels than ever before. There are numerous ways today to get help buying a home. When you’re in the market for a new home, check out Brookfield Residential communities. You can search for beautiful new homes throughout the U.S. to find your dream home.

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