OHFA First-time Home buyer loan conditions
All you need to do is satisfy one of the three conditions listed here to qualify for a OHFA First-Time Home buyer program.
- Be an honorably discharged veteran
- Are someone with no primary residence for the past three years
- Willing to buy a house in the target area
Your credit score matters in home loans for first time home buyers. You must have a score of 640 at least. But, there are means to improve your credit score, never worry. You can get a list of the HUD-approved counseling agency on the website and ask them what to do.
Next thing to worry about is the Income and Purchase price limits. This will vary as per the county and the community. You can verify this limit by going to the website myohiohome.org and clicking on Find a Lender. For instance, in the Butler county, the income limits for 1 or 2-person family is $70,700 and if you have 3 or more people in the family, it is $81,305. The Purchase Price Limits for new and existing homes is $255,574.
The Mortgage Tax Credit in Target Area income limits is like this. The Income Limits for 1 or 2-person family is $84,840 and for 3 or more family is $98,980. The Purchase Price Limit for new and existing homes is $312, 368. Learn about the first time home buyer tax credit here.
The Target Area must fall into one of these two groups.
The ACED stands for Areas of Chronic Economic Distress while the QCT stands for Qualified Census Tracts. Only if your home is in these zones, you qualify for the target area loan. Target area pose many challenges for the housing market.
Do you have bad credit but want a zero-down payment loan?
For the first-time buyer home loans, bad credit will always be a problem. However, there are many options for first-time buyer home loan if you look in the right places. There are several first time home buyer programs which we cover here.
Here are some more options for the first-time home buyer loans with bad credit. You have money lenders who search out people with low scores and give them loans. For first time home buyer loans, no down payment you need to find the lenders, as simple as that. However, you need to check the terms and condition carefully. It has been the trend for the FHA to approve bad credit first time home buyer loan since the person giving the loan, that is the lender, has the power to authorize the loan.
If you are a first time home buyer with bad credit you should definitely review this article.
Zero down payment mortgage loans first time home buyers loan
First, understand that the first-time home buyer’s government loan remains approved by the Federal Housing Administration for as much as 96.5% in most cases. This means that the home buyer only needs pay 3.5% of the amount. You do not have to pay even this down payment in some situations. It depends on the state from where you are applying for the loan.
So, how does one qualify for the first-time buyer home loans with no down payment? Buying a home seems an enormous task to most people due to the big money involved. But, because you have many ways to get the first-time home buyers loan no down payment one should spend some time thinking about it. Check the ways to get the first-time home buyer loans with zero down given here.
Qualified veterans can avail of this no money down home loans for first time buyers. Even members serving active duty qualify can get this zero down mortgage loans first-time home buyers loan. You do not have to pay mortgage insurance. The borrower pays a funding fee. You can roll this fee into the loan amount.
This is one of the best first time home buyer bad credit loan options. However, if you are not a veteran this will not mean much to you. Learn more about first time home buyer down payment assistance programs here.
The funding fee varies between 1.25% and 3.3% depending on the type of service served by the veteran and the size of the down payment. This is for construction and purchase loans.
The Department of Agriculture Rural Development program gives the mortgage guarantee and usually, this program runs out of money before the end of the year. The best part of this bad credit home loans first-time buyer loan is that you need not be into farming to qualify.
The USDA mortgage comes from a bank. You must pay an upfront guarantee fee of 1% and you do not have any mortgage insurance. You can roll the guarantee fee into the loan amount but you must pay annual guarantee fee of 0.35% of the outstanding loan balance.
FHA loans for first time home buyers
This is an option for first time home buyer loans for bad credit. Here the home buyer must make a small down payment. This is 3.5% and people with imperfect credit scores are also eligible for the loan. You must pay an upfront premium of 1.75% to the FHA on the mortgage amount.
In addition, you must pay an annual premium of 0.8% if you make a minimum payment on a 30-year loan.
Fannie Mae and Freddie Mac loans for first time home buyers
Freddie Mac and Fannie Mae provide liquidity to thousands of mortgage companies and banks. Freddie Mac and Fannie Mae support many first-time buyers home loan programs many of which are first time home buyer loans bad credit zero down mortgage payment.
However, one must pay mortgage insurance. This is the PMI and this adds up to the monthly bill. You now must pay homeowners insurance, property tax, mortgage payment, and the PMI.
Qualify for many other first time home buyer loans
The advantages of receiving the cash gift in this first-time home buyer loan program are that the home buyers can make the 20% down payment needed to qualify for lowest mortgage rate offered by the bank. This drives more home buyers to seek this option to make the 20% down payment. Once you pay the 20% down payment, the home buyer does not have to pay any PMI.
Another big advantage is that when home buyers are ready to pay the 20% down payment, they become eligible for Fannie Mae and Freddie Mac bank loans for first time home buyers. Over the thirty-year period, these loans might prove cheaper than the FHA loans.
There are also several first time home buyer grants which we cover in this detailed article.
Cap on loan amounts
In most of the areas nationwide except the high-cost areas, the mortgage loan limits are less than $424,100 which is the cap. The government determines these high-cost areas and conventional loans remain capped at $636,150 for single-family homes. For multi-home units, the cap is $1,223,475.
You have some people who receive cash gifts but do not want to make the 20% down payment. Instead, they want to make small down payments. They opt for the best first time home buyer loans that allow small down payments. As mentioned earlier, one may make use of any loan and if one uses the FHA loan, they must pay 3.5% down payment. Since this allows cash gifts, you may use this option. You may use the same method in the HomeReady mortgage (Fannie Mae) and the Conventional 97 mortgage.
Since the choice of the lender is entirely up to you, make the choice that is suitable for you. This could be that you want a quick close time or you look for home improvement loans for first-time buyers with lesser down payment. Or, you may want to send the application and process it online. Yet others prefer to deal directly with the lender. Spend time to decide which type of lender is suitable for you. This will simplify matters much.
Down Payment Cash Gift
This option works fine if you have someone who is willing to help you pay. FHA allows down payment entirely through gifts alone. To receive your FHA loan first time home buyers gift, you must go through certain norms. Here are the rules of how to apply for a first-time home buyer loan through gift amount:
- You must document the gift with a formal “gift letter”.
- The paper documentation of the way you pay the money from the donor account to your account is needed.
- You cannot accept a gift in disguise. You must declare the gift openly.
Now, you may use the cash gift to make a down payment for your home. They allow this cash gift for a variety of loans including VA Loans, USDA Loans, FHA Loans, jumbo loans, and conventional loans also.
Receive the gift properly
There is one last thing. If you want to use the cash gift to make the down payment for your home, you must receive your gift properly. If you receive it improperly, the lender will reject it immediately. In the gift letter, mention the amount of the gift. You need this for all types of loans – FHA, Conventional, VA, or other – and one should follow all the steps. You can read it in detail below.
Now, mention the subject property address. You must specify the relationship between the gifter and the giftee. At this point, you must mention that the amount is a gift and not a loan and that the giftee will not repay it. You must not to mention any extra information in the letter. It must contain only what they need.
Document the money movement
This is the next necessary step for receiving the first-time home buyer government loan is to prepare the documentation. To make the paper trail, first, you must document the source of the money with which you are making the gift. Let us suppose that the gifter sells his vehicle to raise the money. Then, the gifter must record the dealing and make a note of the money he received in that deal.
After the gifter has made a record of the sale he transacted to raise the money, he transfers that money from his bank account into the bank account of the giftee. He records this transaction and maintains a copy of this in the same file where he has the earlier record.
Make the check: When he makes the check amount for making the gift, he must specify the exact dollar amount he wrote in the gift letter. He makes a photocopy of the check and puts it in the same file. He hands over one copy of the check to the giftee. The lender will need to see this to ensure that the person is genuine.
Deposit the check: The final step in documenting the Down Payment Gift is to go deposit the check personally in the bank. One must avoid depositing the check online using android or iPhone apps. This bank should preferably be the same one where the gifter has the regular account. If the bank is different, the lender will find it difficult to verify the account when he is giving the giftee the money.
Get the receipt: Here the steps to follow is to first deposit the money. Once the transaction is over, one gets the receipt for the deposit. The gifter must make the effort to see that the gift amount remains separate from the other money dealings that he has. The amount on the receipt should remain correctly matched to the amount the gifter mentioned in the gift letter. Make a photocopy of the receipt.
For those people who get multiple cash gifts to make their down payment, the procedure to follow is the same. Only, they must make a record of each gift in the same way.
FHA loans for first time home buyers in Ohio and California with Bad Credit
The Ohio housing Finance Agency (OHFA) will help first time home buyers meet their dream with first time home buyer loans. They give them many kinds of OHFA loans but these first-time home buyer loans remain routed through the OHFA-approved lenders. So, the lenders, credit unions, and mortgage companies in the Ohio state work with the OHFA to offer loans for first time home buyers.
Interesting facts about California for first-time home buyers
- One of the driving factors for first time home buyer loan California is that it is in the middle of a natural disaster zone.
- A CLUE report tells you things about the house you are buying such as tax issues, property repairs, and sewage problems. It stands for Comprehensive Loss Underwriting Exchange report.
- A Natural Hazard Disclosure statement (NHD) tells you about the local conditions such as earthquake zones, soil erosion, toxic waste, and more.
- The CalHFA is a self-supporting state agency. In this respect, it resembles the bigger agency, the HFA, because it does not use the taxpayer’s money.
- The HFA does not lend money directly to the home buyer. Instead, to get the home loan the first-time buyer must approach private lenders.
Facts about Ohio
Here is the list of things about the first-time home buyer loans Ohio offers its residents.
- You may use a Home ownership Voucher to get help to meet the monthly mortgages when you buy your first home. Call your local Public Housing Agency (PHA) to know more.
- You can opt for VA, OHFA FHA, conventional mortgage loan or USDA-RD loan.
- Qualified buyers must complete their free homebuyer education.
- Down payment loan is forgiven after seven years. But, if you sell the house before seven years, you should repay all the loan they gave you.
- OHFA Grants for Grads offers discounted mortgage rates if you graduated recently.