With MHDC Bond Money program letting us know that it could be awhile before the next issue of bond money I wanted to write and post here to all of the agents that assist First Time Home Buyers that there are some alternatives. I am a firm believer in the MHDC bond money programs but they are subject to market conditions and the investors that invest in the bond money program do have to have a good return for their money.
Where does that leave your pre-qualified home buyer when 100% loan programs are disappearing?
First we want to make sure we ask all of the right questions, of course the number one thing we are taught in real estate is location, location, location, ? Is the property being looked at in a rural area? or at least in an area that is outside a Metropolitan Area ? Then we may have a 100% option in Rural Development - Rural Development allows the buyer to buy a home finance 100% without any Private Mortgage Insurance instead they have a guarantee from the USDA. It's an excellent way to finance a home however it is location and income specific but the buyer can have been a home owner in the past.
Second, FHA financing with gift - FHA allows financing for 97% and allows the 3% to be gift funds, this is an excellent alternative for 100 percent financing, they also allow different down payment assistance programs like Ameridream and Nehimiah.
Third VA - if your borrower is a Veteran that is Eligible for a VA Loan we are able to finance 100% of the home purchase without Private Mortgage Insurance that is made possible with the guarantee by the VA.
Fourth - don't forget the stimulus rebate checks - many people are going to be getting rebate checks in May that is a great source of funds or a great start on a savings account that could lead to a 3% down payment.
Remember its 1200 per married couple and 300 per child - if the family has 3 children your looking at 2600 that can go toward down payment.
Even though it may be a bit more difficult there is a great feeling in saving for the down payment on the house for the home buyer and they start out with equity built in to the purchase, which is great should something happen and they have to sell the house in the long run it will be a healthier market for everyone.
Should you have any questions about any of these programs please feel free to contact me at 417 447 7927.
Darren Stewart
OakStar Bank
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