Government Assistance Mortgage Loans and Home Purchase

Government assistance mortgage loans can be a game-changer for those who need a little extra help getting into a home of their own.

The Federal Housing Administration (FHA) offers one type of government assistance mortgage loan, which allows for down payments as low as 3.5%.

Many first-time homebuyers are eligible for FHA loans, which can be a huge advantage for those who may not have a lot of savings to put towards a down payment.

The FHA also has a lower credit score requirement, making it easier for people with less-than-perfect credit to qualify for a mortgage.

FHA loans can also be used for home purchases, refinancing, and even repairs, making them a versatile option for homeowners.

The Homeowner Assistance Fund (HAF) has provided $9.961 billion to support homeowners facing financial hardship associated with COVID-19. This fund has helped over 549,000 homeowners, preventing mortgage delinquencies and defaults, foreclosures, and displacement.

HAF funds can be used for assistance with mortgage payments, homeowner's insurance, utility payments, and other specified purposes. The majority of HAF assistance has reached economically vulnerable and traditionally underserved homeowners, including low-income homeowners, homeowners of color, and female homeowners.

Foreclosure filings have remained below pre-pandemic levels, thanks in part to the HAF. This is a significant achievement, given the devastating impact of foreclosures on communities.

There are several government assistance mortgage loans available, each with its own unique features and benefits. For example, the Keystone Advantage Assistance Loan Program provides a second mortgage loan to help with down payment and closing costs. This loan can be used in conjunction with other PHFA first mortgage home purchase loan programs.

Here are some key details about the Keystone Advantage Assistance Loan Program:

Another option is the WHEDA Down Payment Assistance Programs, which can be used with either WHEDA first mortgage program. These programs can provide 100% financing in many instances, making homeownership more accessible to those who might not have been able to afford it otherwise.

The WHEDA Rehabilitation Mortgage Programs can help homeowners renovate their current home or make a new home "move-in ready." These programs offer flexible financing options and can be used in conjunction with other WHEDA mortgage programs.

In addition to these programs, there are also several other government assistance mortgage loans available, each with its own unique features and benefits. For example, the Access Forgivable program offers 4% of the purchase price up to $6,000 in assistance for down payment and closing costs, forgiven monthly over 10 years.

The Access Deferred program offers 5% of the purchase price up to $7,500 in assistance for down payment and closing costs as an interest-free loan, deferred for the life of the mortgage. And the Access Repayable program offers 10% of the purchase price up to $10,000 in assistance for down payment and closing costs as an interest-free loan, repaid monthly over a 10-year period.

Finally, the SmartBuy program offers $5,000 in assistance for down payment or closing costs, as well as up to $40,000 in assistance for student loan debt relief. This program is available to first-time and repeat homebuyers statewide, and can be used with Fannie Mae and Freddie Mac loan types.

To qualify for a government assistance mortgage loan, you'll need to meet certain eligibility requirements. These requirements vary depending on the program, but most require you to be a first-time homebuyer, complete a homebuyer education course, and work with an approved housing counseling agency.

You'll also need to meet income and credit score requirements, with a minimum credit score of 660 for some programs, such as the Keystone Advantage Program. In this program, borrowers must also have a minimum loan amount of $500 and liquid assets not exceeding $50,000 after deducting closing costs.

Here's a breakdown of income limits for some programs:

Remember, these requirements are just a starting point, and you should research each program thoroughly to determine which one is right for you.

To be eligible for many homebuyer programs, you'll need to meet certain requirements. You must be a first-time homebuyer, complete a homebuyer education course, and work with an approved Housing Counseling Agency.

You'll also need to meet program income eligibility requirements, which vary depending on the program. For example, the HomeFirst Loan Application in New York City has specific income limits based on household size. Here's a breakdown of the maximum household income for each household size:

In some cases, you may be required to have a minimum credit score, such as the 660 credit score required for the Keystone Advantage Program. You'll also need to meet specific debt requirements, like having at least $1,000 in student loan debt for the SmartBuy program.

To qualify for the Access Forgivable program, you'll need to meet certain requirements. The household income and purchase price limits must be met, and a minimum credit score of 640 is required.

You can choose between a new construction or an existing home, and both first-time and non-first-time homebuyers are eligible. All Illinois counties are eligible for this program.

To contribute to the program, you'll need to pay $1,000 or 1 percent of the purchase price, whichever is greater. This contribution is a one-time payment.

You must live in the home as your primary residence to qualify for the program. Homeownership counseling is also required prior to closing, with both online and in-person options available.

Here's a summary of the key requirements:

You can get up to $8,000 in downpayment and/or closing cost assistance through the Keystone Advantage Assistance Loan, an interest-free loan amortized over 10 years, if you work for a Participating EAH Employer and meet the eligibility requirements.

The Keystone Advantage Assistance Loan can be combined with a PHFA mortgage to reap even more benefits. All PHFA loans have competitive rates and fees, free homebuyer counseling, and downpayment and closing cost assistance loans available.

Here are some key benefits of PHFA loans:

To start the home buying process, you'll need to contact a HUD-certified counseling agency in your borough. These agencies will promote the HomeFirst program, distribute program guidelines, and enroll consumers in Homebuyer Education classes.

You can find a list of HPD-approved counseling agencies in your area, but let's take a look at two examples to get started. MHANY Management Inc. is a counseling agency located in Brooklyn, NY, and they offer services in both English and Spanish.

Housing Partnership Development Corporation is another agency, this time located in Manhattan. They offer services in English only.

To become eligible for the Down Payment Assistance Program, you'll need to meet certain income requirements. The counseling agencies will certify your income eligibility, so be sure to ask about their specific requirements.

Once you've completed the Homebuyer Education classes, you'll need to get pre-approved by a participating lender. The counseling agencies will refer you to a lender who can guide you through the pre-approval process.

Here are some key points to keep in mind as you start the home buying process:

The Homestead Downpayment and Closing Cost Loan is a fantastic option for homebuyers looking to make their dream of homeownership a reality. It provides up to $10,000 in downpayment and closing cost assistance in the form of a no-interest, second mortgage loan.

To qualify, borrowers must meet the minimum downpayment requirement based on the loan type, and the assistance can provide the remainder of the downpayment and closing costs. In certain cases, the funds may provide additional down money to make the property affordable to the buyer.

Homebuyers participating in PHFA's Keystone Home Loan Program are eligible to apply if they meet certain HOMEstead Program income and home purchase price limits that vary by county. Most major cities and seven counties are wholly excluded from the program because they receive their own federal allocation.

Here are the income and purchase price limits for HOMEstead borrowers in New York City counties:

The home must also meet other property guidelines specified by federal rules, and federal regulations for Lead-Based Paint Hazard Reduction (24 CFR Part 35) are applicable to HOMEstead Second Mortgage Program applicants. Therefore, most homes built prior to 1978 are not eligible for HOMEstead assistance.

Loans are made by a local participating lender, not by the Agency itself, and program requirements and funding availability are determined by the US Department of Housing and Urban Development as set forth in the HOME Investment Partnership Program and the American Dream Downpayment Initiative.