Buying your first home is clearly a big step: It requires a significant amount of investment, cash on hand for a typical down payment, and a decision that will have a big impact for years into the future. But finding and purchasing your first house can also be a challenge, one that often depends on financial situations well out of a buyer's control.
However, there are some first time home buyer advantages, including specific programs available in the state of Indiana to help those who do not currently own their own home. This assistance can make purchasing a home, especially paying for upfront costs, easier for a number of buyers. Let's take a look at what's available for potential or (new homeowners)!
The IHCDA First Place Program
The Indiana Housing and Community Development Authority (IHCDA) offers a First Place program via Federal services to help to qualify first-time homebuyers in the state to afford a house. This program offers down payment assistance of 6.0%, making it easier for buyers to afford to purchase homes even if they are low on cash – a common theme for many of these programs. There are FICO credit score requirements to qualify for the program, ranging from a score of 640 to 680 based on additional factors.
When it comes to who is considered a first-time homebuyer under the First Place program, buyers must have spent at least three years without owning a primary residence, even if they owned a home at some point in the past.
Note families participating in this program must use an FHA (Federal Housing Administration), 30-year fixed mortgage. These FHA loans are also designed to help first-time home buyers and include benefits of their own: The most notable is a particularly low down payment, which is even more effective when combined with First Place down payment assistance.
The HCV Homeownership Program
Indiana, in conjunction with the U.S. Department of House and Urban Development, also offers a Housing Choice Voucher (HCV) homeownership program that's designed to help low-income families afford a home and related payments.
Qualifying families must make a certain amount of income, currently at $15,000, to ensure the ability to pay important expenses. A member must also prove full-time employment for at least a straight year before applying for assistance. The family must also make a minimum down payment of 3% or more with at least 1% coming directly from the family's own resources. To that end, the family must also have at least $3,000 in savings. Upon acceptance, the family will also need to complete the First Time Home Buyers counseling session: These sessions provide important education on the responsibilities and expenses that come with owning a home, and how to properly manage finances with considerations like monthly mortgage payments, etc.
Meet all these requirements, and the program provides a voucher for assistance in purchasing a new home and monthly funds for dealing with homeownership expenses.
The Federal Mortgage Credit Certificate (MCC)
This is a particular Federal income tax credit that can help make purchasing a new home more affordable. When claimed, this tax credit will reduce federal income tax liability for the year in which a first time homebuyer purchased a home. This tax credit is an additional way to save money that can be used in combination with any of the other programs that we've mentioned here!
Specific City Assistance
We've covered important state and federal programs that can help homeowners afford their first house. However, there are also a number of more localized programs that could be able to help, depending on what city you live in and if you meet their requirements.
You should check the city where you are interested in purchasing for more specifics. One example is the First Time Homebuyer Program for Gary, Indiana, which offers assistant to those under a certain income level (currently around $46,000 for a two-person household), covering up to 10% of the purchase price as down payment assistance. In return, applicants must complete a first time homebuyers class and counseling sessions.
Another example is the HOPE of Evansville's Homebuyer Assistance Program, which also offers down payment assistance to borrowers who have qualified for a mortgage.
A note about repeat buyers
If you have purchased a home before but are still interested in homeowner assistant, don't give up! There are a variety of caveats and carveouts in many programs that allow you to still qualify even if you have purchased a home before.
The First Place program, for example, has exceptions for specific targeted areas where the state wants to encourage more home development. Other programs typically waive buying limitations for military veterans as well. Indiana also has a separate "Next Home" program that offers its own benefits for repeat buyers, designed to help families that are interested in purchasing a larger house, moving to a different area, etc.
Would you like to learn more information about how to buy a home, what new home designs are right for you, and what first time home buyer checklists you should being following? Contact Lancia Homes today and take a look through our website. Our specialists are on hand to help you make a wide variety of decisions about a new home and the design that will work best for your future.