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LESSON 7: SPECIAL AND FIRST-TIME
BUYER PROGRAMS
For many people, the lack of a down
payment is the greatest hurdle to homeownership. This is especially
true for first-time home buyers and low-income consumers. Today,
however, lenders offer numerous special loan programs that require
less money down or feature other benefits. Some target first-time
home buyers while others primarily help people who don't make much
money.
 Many
people think you need a 20 percent down payment to buy a home.
Not so. You can put less money down, but you'll most likely
have to get private mortgage insurance to protect the lender. |
If you need extra help getting into a home,
you should check with your bank or financial institution to see
if they offer any of these special mortgages.
State housing agencies and/or local HUD offices can usually provide
references too, as can Consumer Credit Counseling Service branches.
Here's
a brief summary of some of the more popular programs to get you
started:
Department
of Veterans Affairs (VA) mortgages
VA loans are backed, but not issued by, the U.S. government and
they help veterans and their spouses purchase homes. They don't
require down payments unless the house being purchased is relatively
expensive and they have other benefits associated with them. For
instance, the government says it's more understanding when borrowers
default than conventional lenders.
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