Financing your First Home

Financing Options for First-time Homebuyers

There are many programs and grants for first-time homebuyers that offer financial help, and you may be eligible for various types of assistance.
Here are nine programs and grants designed to help you land a great mortgage and get a place of your own to become a permanent resident in Iron County.

FHA Loan

With an FHA loan, the Federal Housing Administration in an agency within the U.S. Department of Housing and Urban Development and insures the mortgage. With this backing lenders are guaranteed a layer of protection, meaning that they won’t experience a loss if you default on the mortgage.
These loans typically come with competitive interest rates, smaller down payments and lower closing costs than conventional loans.
You can be eligible for a mortgage with a down payment as low as 3.5 percent of the purchase price with a credit score of 580 or higher. If your credit score is lower than 580, you may still qualify but with a higher down payment, typically at least 10 percent.

USDA Loan

This loan is not well known but is offered as a homebuyer-assistance program through the U.S. Department of Agriculture. The catch for this type of loan is that the home must be located in specific rural areas.  However, you don’t need to buy a farm to be eligible.  Like, the FHA, the loan is guaranteed through the USDA. In addition, there may be no down payment required and the loan payments are fixed.  Typically, applicants can get streamlined processing with a credit score of 640 or higher.
You can still qualify for the loan with a score below 640, but the lender will ask for extra documentation about your payment history.
This type of loan also has income limitations, which can vary by region.

VA Loan

This loan is designed to help active-duty military members, veterans and surviving spouses buy homes. The Veteran’s Administration guarantees part of the loan, making it possible for lenders to offer some special features. The loans come with competitive interest rates and require no down payment. You aren’t required to pay for private mortgage insurance, and a minimum credit score isn’t needed for eligibility. In addition, if it becomes difficult for the homeowner to make payments on the mortgage, the VA can negotiate with the lender on your behalf.

Good Neighbor Next Door

This program is sponsored by HUD and provides housing aid for law enforcement officers, firefighters, emergency medical technicians and pre-kindergarten through 12-grade teachers.

Fannie Mae or Freddie Mac

Fannie Mae and Freddie Mac are government-sponsored entities. They work with local lenders to offer mortgage options that benefit low and moderate-income families. With these entities backing your loan, lenders can offer competitive interest rates and accept down payments as low as three percent of the purchase price.

Energy-efficient Mortgage

A green mortgage is designed to help add improvements to your home to make it more environmentally friendly. The federal government supports EEM loans by insuring them through the FHA or VA programs.
The advantage of this loan is that it allows the homebuyer to create an energy-efficient home without having to make a larger down payment. The extra cost is simply rolled into your primary loan.

FHA Section 203(k)

The FHA Section 203(k) is a rehabilitation program that allows a buyer to be able to purchase a fixer-upper and be able to afford the work that needs to be done.  This type of loan is backed by the FHA and takes into consideration the value of the residence after improvements have been made. It then allows the buyer to borrow the funds needed to carry out the project and includes them in their main mortgage.
The down payment for this type of loan can be as low as 3 percent.

Native American Direct Loan

The Native American Veteran Direct Loan program has helped Native American veterans and their spouses buy homes on federal trust lands since 1992. The VA serves as the lender.
If eligible, the buyer doesn’t have to make a down payment or pay for private mortgage insurance. This first-time homebuyer loan offers a 30-year fixed-rate mortgage and low closing costs.

Local Grants and Programs

In addition to the programs offered by the federal government, many states and cities offer help to first-time homebuyers.
You can check with your state’s or community’s website for information on housing grants and programs available in your area or contact the Sam Dodd team as we stay on top of all these programs for you or local HUD-approved housing counseling agency to learn more about programs in your area that might apply to your situation.

If you are thinking of buying a home and would like more information on any of these programs please use the form below and we will call or email you!   


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