When you hear talk about First Time Homebuyer program they are generally talking about a “FHA Loan”. These are loans that are insured by the Federal Housing Administration.Loan and Mortgage for simplicity will be considered interchangeable (same thing). Presently, the maximum FHA loan limit for 2021 is $402,500 for a Single Family Home (subject to county – ask Google “FHA loan limit for your county”). The loan limit does change annually. This loan is geared to first time homebuyer with a middle credit score down to 580 and upwards for a 96.5% loan to value of the purchase price. The seller can contribute up to 6% of the purchase price towards closing costs only. The buyer can have a Non-Occupant borrower co-sign on the loan for the purpose of helping the buyer to qualify. There is a higher threshold for the DTI above 46% versus that of the conventional loan. These loans can be used to purchase, refinance for a better rate or term or refinance for cash out on a primary home. Property types include houses, townhouses, villas, condos, and manufactured homes.
You may also elect to get pre-approved for a loan which requires verification of your income, credit, assets and liabilities. It is recommended that you get pre-approved before you start looking for your new house so you: