Although the federal government has offered homebuyer programs in the past, for Tax Year 2015, most of the available home buyer programs will be at the local and state levels. State and local agencies, along with lenders and non-profit organizations often offer support for homebuyers in the form of grants or lower-interest loans, or assistance in paying down payments and closing costs.
Types of programs
First-time homebuyer programs try to encourage homeownership in a variety of ways. Often, the goal of a homebuyer program is to either encourage ownership among a certain economic demographic or to increase ownership in a certain target area. Some ways agencies use to increase ownership include:
- Offering free courses on home buying.
- Consumer counseling with a goal of homeownership.
- Favorable lender terms.
- Local or state tax credits.
There are dozens of programs, even hundreds spread out throughout various cities and states across the U.S. for 2015. Often, these programs have specific requirements of the buyers such as “first time ownership” or an income threshold. Other programs require that potential homeowners attend classes on owning a home, credit, financing a mortgage and other types of education geared toward insuring homeowners fully understand the ramifications of homeownership.
An example of one of these programs in the Boise area is the Finally Home! ® program at Idaho Housing and Finance Association. Completion of the classes in the program may help first time homebuyers qualify for down payment and closing cost assistance and may also allow entry into programs that accept higher debt to income ratios.
Find programs in your area
To locate programs in the Boise area, or even in nearby locations, first try searching under variations of “home buyer assistance 2015” plus the name of a specific area neighborhood, your specific city (Boise, Meridian, etc.) or just Idaho in your favorite browser. Make certain you include the year so that you find programs available in 2015.
Next, go to HUD.gov. There you can find a database of programs offered by cities, counties and states across the U.S. Type some version of “home buyer program” and Idaho, Ada County or Boise or Meridian in the search box. You will retrieve a list of links to various programs available in given areas. This electronic database is not organized in any specific way, so you will need to research each link, but the types of programs and incentives available may be just what you need to move into the homeownership category.
One of the potential boons for homebuyers with limited funds for down payment is a so-called 97% loan. Offered through both Freddie Mac and Fannie Mae, loans to otherwise qualified buyers with as little as three percent down payment would allow more buyers to enter the market. The program is slated to begin December 2014 and last through 2015.
These products seem similar to those considered predatory lending practices just a few years ago. Differences include creditworthiness stipulations and full documentation, the fact that the loans will be fixed-rate and not adjustable, and with terms maxing out at 30 years. Careful control of these areas and other risk-management practices should minimize the number of defaults for these programs while opening up homeownership to first-time buyers.
Where to start
As real estate professionals, we know what is available in the Boise area. If you are a first-time homebuyer or are looking for help getting back into the housing market, let us know when you call us so that we can connect you with the programs that best meet your needs.