Making a mortgage payment is currently cheaper than paying the monthly rent in many of the largest metro areas in the U.S. For many homebuyers, the primary barrier to purchasing a home is the lack of upfront funds to make a down payment and to pay for their closing costs. Fortunately, there are state run programs that can contribute funds that can be used towards the down payment or closing costs. There are also home loan programs that can provide up to 100% financing for eligible homebuyers.
Types of Financial Assistance Programs
State and Local Government Programs
Many states and local governments sponsor loan programs that can make it more affordable for first time home buyers, low to medium income residents, teachers, first responders, to purchase their primary residence.
These home loan programs can have a low down payment requirement, provide down payment assistance, contribute to closing costs, or a combination of both.
Each program has specific eligibility criteria that homebuyers must meet. Criteria can include a minimum credit score, household income limit, home acquisition limit, and completion of a home buyer educational course. Some states require a low borrower contribution, however, this amount can often be gifted to the homebuyer.
Certainty Home Loans offers homebuyer programs for the following states:
- North Carolina
- South Carolina
If you are interested in learning about State and Local Government programs and their eligibility criteria, it’s important to work with a mortgage professional who is licensed in your state.
100% Financing Home Loans
100% financing home loans are mortgages that finance the entire purchase price of a home, eliminating the need for a down payment. While many of these programs ceased after the market turndown at the start of the new decade, some of these home loans remain. The most popular two programs are:
- VA Home Loans do not have the income limit nor the property location requirement of USDA home loans, but they are only available to active duty servicepersons, veterans, select military spouses, reservists, members of the National Guard, and other qualified military personnel. Unlike USDA and FHA loans, VA loans are the only government-backed loans without monthly mortgage insurance premium.
- USDA Home Loans are available to eligible borrowers who meet income and credit standards listed in guidelines set by the United States Department of Agriculture (USDA). Since a USDA home loan doesn’t require a down payment or a high credit score, homebuyers may find qualification easier to obtain than for many other loan types as long as their property is located within USDA-eligible geographic areas.