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First time home buyers often experience difficulty saving and putting down a significant down payment. Yet, every buyer should have the opportunity to purchase a home. For this reason the federal government, state and local municipalities have developed numerous loan programs to assist home buyers with little or no down payment.
Numerous programs also exist for Phoenix Metropolitan residents not qualifying for "first time" buyer assistance.
Contact Our Office to determine your eligibility or request additional information about first time home buyer programs.
We can also be reached Toll-Free, 888.842.6090.
FHA SINGLE-FAMILY MORTGAGE PROGRAM
FHA's mortgage programs help low and moderate income families become homeowners by lowering some of the costs of their mortgage loans. FHA mortgage insurance also encourages mortgage companies to make loans to otherwise credit worthy borrowers and projects that might not be able to meet conventional underwriting requirements, by protecting the mortgage company against loan default on mortgages for properties that meet certain minimum requirements--including manufactured homes, single-family and multifamily properties, and some health-related facilities.
Section 203(b) is the centerpiece of FHA's single family insurance programs. It is the successor of the program that helped save homeowners from default in the 1930s, that helped open the suburbs for returning veterans in the 1940s and 1950s, and that helped shape the modern mortgage finance system.
Today, FHA One to Four Family Mortgage Insurance is still an important tool through which the Federal Government expands home ownership opportunities for first time home buyers and other borrowers who would not otherwise qualify for conventional loans on affordable terms, as well as for those who live in undeserved areas where mortgages may be harder to get. In 1997, FHA insured more than 790,000 homes, valued at almost $60 billion, under this program. FHA currently insures a total of about 7 million loans valued at nearly $400 billion. These obligations are protected by FHA's Mutual Mortgage Insurance Fund, which is sustained entirely by borrower premiums.
Section 203(b) has several important features:
Down payment requirements can be low. In contrast to conventional mortgage products, which frequently require down payments of 10 percent or more of the purchase price of the home, single family mortgages insured by FHA under Section 203(b) make it possible to reduce down payments to as little as 3 percent. This is because FHA insurance allows borrowers to finance approximately 97 percent of the value of their home purchase through their mortgage, in some cases.
Many closing costs can be financed. With most conventional loans, the borrower must pay, at the time of purchase, closing costs (the many fees and charges associated with buying a home) equivalent to 2-3 percent of the price of the home. This program allows the borrower to finance many of these charges, thus reducing the upfront cost of buying a home. FHA mortgage insurance is not free: borrowers pay upfront insurance premiums (which may be financed) at the time of purchase, as well as monthly premiums that are not financed, but instead are added to the regular mortgage payment.
Some fees are limited. FHA rules impose limits on some of the fees that mortgage companies may charge in making a loan. For example, the loan origination fee charged by the mortgage company for the administrative cost of processing the loan may not exceed one percent of the amount of the mortgage.
HUD sets limits on the amount that may be insured. To make sure that its programs serve low and moderate income people, FHA sets limits on the dollar value of the mortgage loan.
Right now FHA interest rates are extremely competitive, even lower than conventional rates!
To learn more about FHA financing programs available to first time home buyers, please Contact Our Office Today.
We can be reached Toll-Free, 888.842.6090.
HOME BUYER GRANTS
The Home in Five Program is a program primarily for first-time home buyers who wish to purchase a qualifying home in Maricopa County. Individuals or families who qualify are able to obtain a 30-year fixed rate loan at a competitive interest rate, with 5% down payment/closing cost assistance. This assistance is a grant and does not require repayment. *
Financing for these fully assumable loans (loan may be assumed by a qualified borrower meeting the first-time home buyer requirements, income and acquisition price restrictions in place at the time of the assumption) is available on new or existing homes, condominiums, townhouses or manufactured homes on a first-come, first-served basis through Participating Lenders.
PRIORITY LENDING AREAS
The City of Phoenix has designated certain areas as Priority Lending Areas. Homes located in Priority Lending Areas qualify for attractive 30-year fixed rate loans, with 6% down payment/closing cost assistance.
Click here for map of Priority Lending Areas.
HOW TO QUALIFY FOR FIRST TIME HOME BUYER GRANT ASSISTANCE
• Your annual household income must fall within the levels specified below.
• You must not have owned a home for at least the last three years unless the home you are buying is located in one of the designated “Targeted Areas” or you are a Qualified Veteran.
• You must meet all credit requirements.
Income cannot exceed:
For households of Two or Fewer $64,524 for Non-Targeted areas and $74,203 for Targeted areas
For households of Three of More $74,203 for Non-Targets areas and $77,542 for Targeted areas
PURCHASE PRICE LIMITS
Only homes located in Maricopa County are eligible. The below purchase limits apply to new and existing homes:
Single Family $311,625 Non-Targeted areas and $380,875 for Targeted areas
Duplexes $350,988 Non-Targeted areas and $428,985 for Targeted areas
WHAT ARE TARGETED AREAS?
Targeted areas are neighborhoods that have historically been undeserved in mortgage loan origination.
Targeted Areas will receive the benefits of both Target Areas and Priority Lending Areas. For example, the higher income limit, higher purchase price limit, no first-time home buyer requirement, interest rate of 6.29% and 6% down payment/closing costs assistances, as long as Targeted Lending Area funds are available.
Click Here to See a Map of Targeted Areas.
VETERANS EXCEPTION
Qualified Veteran's do not need to meet the first-time home buyer requirement on any loan funded through the program issued prior to December 31, 2007
A "Qualified Veteran" is a person who served in the active military, naval, or air service, and who was discharged or released there from under conditions other than dishonorable (as provided in 38 U.S.C. Section 101) who has not previously obtained a loan financed by single family mortgage revenue bonds utilizing the veterans exception to the 3-year requirement set forth in Section 416 of the Tax Relief and Health Care Act of 2006.
*ABOUT RECAPTURE TAX
When you receive a first-time home buyer loan, you are receiving the benefit of a lower mortgage interest rate and/or down payment/closing cost assistance that is not customarily available on other mortgage loans. The tax-exempt mortgage revenue bond program used to fund your mortgage loan is governed by federal law. The law mandates a "recapture" of some of the benefit of the program if buyers meet ALL three of the following criteria.
1) The property ceases to be the principal residence in the first full nine years of ownership
2) There is a profit on the sale of the home
3) The household income increases significantly (generally over the program limits in the first year and an additional 5% over the previous year every year thereafter.)
If "Recapture Tax" is owed, it is computed and paid to the IRS for the tax year in which the home is sold. For the average buyer in these programs, it is very unlikely that they will be required to pay because their income is lower than that allowed. But if Recapture Tax must be repaid, it will never exceed the lesser of 6.25% of the original loan amount or one-half of the gain on the sale of the home.
To find out more about Recapture Tax, please see:
IRS Website, http://www.irs.gov/instructions/i8828/index.html
PARTICIPATING LENDERS
Mira Vista Properties Realty Group is proud to work with the following Participating "Home in Five Program" Lender:
Kelly Zitlow
Suburban Mortgage, Inc.
Vice President
Certified Mortgage Planner
Suburban Mortgage, Inc.
(480) 355-8105
kzitlow@submort.com
If you are a first-time home buyer located in the Phoenix Metropolitan area, this is a great opportunity to receive virtually 100% financing on your home purchase, at competitively low interest rates.
Our staff is available to help you locate the home you have always dreamed of today, so you're ready to buy when the funds become available.
Contact Mira Vista Properties Realty Group today to learn more about the Home in Five Program!
We can be reached Toll Free, 888.842.6090.
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