With today's combination of lower home prices, some of the lowest
interestrates the industry has ever offered, and the $8000 tax
incentive for
first-time buyers, buying a home has never been so attractive.
The only
real hurdle left for many Americans is coming up with a down payment.
With this in mind, I have put together some of the most frequently
asked questions I get about down payments in today's market.
Q.
Are there any no-down payment programs left?
Yes. While it's true that most of the popular no-down payment programs
disappeared in the wake of the subprime mortgage collapse, there are
still
two longstanding government-backed programs that offer mortgages
with no down payment: the USDA Rural Development Program and the VA
Loan Program.
A USDA Guaranteed Loan is a government-insured, 100% purchase loan.
This means there is no down payment required if you – and the
house you intend to buy – qualify for the program. Not all
areas qualify, but you'd be surprised at how many neighborhoods in your
area do. If you intend to purchase in Florida and are intrested to see
if your potential property qualifies for the USDA Guaranteed Loan, you
may check for eligibility at the USDA
website. There are income and other limitations, but if coming up with
a down payment is challenging, you might want to consider this program.
If you or your spouse is a military veteran, you may qualify for a 100%
financed loan from the US Department of Veterans Affairs. More than 29
million veterans and service personnel qualify for this service
benefit. Give us a call to find out if you're one of them.
Q.
Are there any other government-insured programs that can help someone
struggling with a down payment?
Yes. In 1965, the federal government created the FHA loan programs to
encourage homeownership throughout the country. FHA-insured mortgages
offer many benefits, including a minimum down payment of 3.5%.
FHA-insured loans have grown in popularity recently due to the seller's
ability to pay closing costs up to 6% and a temporary increase in loan
limits up to $729,750 in certain high-cost areas, which allows more
potential buyers to utilize this program. If you are interested in a
FHA mortgage in Florida, here are the latest Florida
County Loan Limits.
Q.
May I use a gift from family members as part of my down payment?
Yes. In many cases, immediate family can provide monetary gifts to be
used as a down payment. There are restrictions of course, and strict
documentation will be required, but we will gladly walk you through the
finer details of this process. Be sure to mention this option when
you're filling out an application with us.
Q.
May I use funds from my IRA for my down payment?
Yes. First-time home buyers can use funds from an IRA under certain
circumstances for a down payment. The rules regarding this option,
however, can be complicated, especially with a Roth IRA, and it's
important to understand any and all tax implications before tapping
into these accounts. Please talk to your tax professional before making
any decisions. If you don't have one, we'll gladly refer you to one we
work with on a regular basis.
Q.
May I use the $8,000 tax credit as my down payment?
No. At the time of the writing of this article, qualified first-time
home buyers do not have direct access to the $8,000 credit to use as a
down payment. In May, HUD officials made an announcement to the
contrary, but statements backing the announcement were quickly
withdrawn from the HUD website. This doesn't mean that HUD and
lawmakers will not allow this in the future. For complete details you
may read my blog about the
$8,000 tax credit. We're following this issue closely and
will let you know if anything changes.
Joshua Lerette - The Tampa Bay Mortgage Pro
Innovative Mortgage Services, Inc.
(P) 727-488-7355
josh@TheTBMortgagePro.com
www.TheTBMortgagePro.com
Joshua Lerette, The
Tampa Bay Mortgage Pro, is a mortgage specialist in
St. Petersburg, Florida providing financing solutions for homeowners
and homebuyers alike. The Tampa Bay Mortgage Pro specializes in First
Time Homebuyer programs utilizing FHA, VA, and the USDA Rural Housing
Loan.
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