With the changing times in lending, it is getting harder and harder for buyers to qualify. I know I have my share of clients that have wanted to purchase and cannot get financing. Two or Three years ago, these same buyers wouldn't have had any issues. I mean lenders wouldn't have even batted an eye.
Here are some of the programs that my buyers, especailly the first time home buyers, are taking advantage of to get around some of these issues.
1. The Community Development Mortgage Program (CDMP)
This program allows buyers to put only 2% down as a down payment verses the standard FHA minimum of 3.5%. There is no PMI and they have to have a 620 minimum Credit Score. The buyer's Back Ratio is 42% and there is no Front Ratio requirement. The seller can pay up to 6% closing cost and one year employment history is required with a W-2'd or Self-Employed. There are other restrictions, but these are the main points. This particular program is through Wells Fargo
2. United States Department of Agriculture Rural Development Program (USDA Financing)
This program is through the government and its main selling point is there is a no (0%) down payment. The largest requirement is that the property must be in the USDA qualifying areas. There are income limits and they are based on the specific county the property is located in. For more information click on the link below.
3. Mortgage Credit Certificate (MCC)
This program allows first-time home buyers to get up to $2,000.00 per year toward their mortgage payment in the form of a tax credit. Normally, the mortgage interest you pay is tax deductible, which is great. This program allows buyers to claim 20% of the interest (up to $2,000 per year) as a credit. Some qualifications include: 1. You cannot have owned a home in the past 3 years. 2.Your income cannot exceed $57,000 for single and 2 person house holds and $65,000 for a 3 person house hold. 3. Sales price cannot exceed $220,000 for a new home and $210,000 for an existing home. 4. Funding in this program is limited and can run out. There are other guidelines as well, contact your local Wells Fargo Mortgage Consultant for details.
To buyers and agnets, good luck and I hope you can find programs that fit your specific needs the best.