In this blog post, we examine the programs that are available to home buyers in the 7 states where Divvy operates.
It’s not always easy to buy a home today, especially since home prices have appreciated in recent years while rents and other expenses have also increased. That can make it tricky to save up for a large enough down payment to qualify for a mortgage. Another challenge is having enough income to cover the monthly payment, including PMI, insurance, and taxes.
Fortunately, there are a lot of home buying assistance programs for all kinds of home buyers throughout the U.S. Some of these are federal government programs while others are state- or city-based programs.
If you’re interested in buying a home and want to see which programs might be available to you, take a look through the list below. Also, don’t forget to check out Divvy Homes and see if we might be a good fit for you.
U.S. Government Home Buying Assistance Programs
The federal government has traditionally been a big proponent of homeownership. There are a number of different programs designed to support people who are trying to buy a home. We’ve compiled a list of the most important programs below:
FHA Loan Program: An FHA loan can be a great option for lower-income or first-time home buyers. It can be easier to get approved for an FHA loan than other types of loans. Here is what you need to know about this program:
- If your credit score is 580 or higher, you can get approved with just a 3.5% down payment.
- If your credit score is 500-579, you can get approved with a 10% down payment.
- Your monthly payment will include something called Mortgage Insurance Premium (MIP) which can cost you 1% of the loan amount per year, or more.
- You’ll need to work with an FHA-approved lender to get your loan.
The Homeowner Voucher Program: This program provides subsidies to low-income, first-time buyers to use toward buying a home. You must meet HUD requirements for eligibility. These requirements include:
- You must be a first-time home buyer.
- You must meet minimum income requirements for the program.
- Your household must include at least one adult who has been working full-time for at least one year.
- You must complete a homeownership and housing counseling program.
The VA Home Loan Program: The Department of Veterans Affairs (VA) manages this program, which makes home loans available to veterans of the U.S. military. These loans are issued by private lenders, such as banks and mortgage companies, but the VA guarantees a portion of the loan so you can get better terms. Unlike many other programs, you do not need a down payment and there is no requirement to pay private mortgage insurance. The eligibility requirements for VA loans are as follows:
- The home must be occupied by a veteran or a surviving spouse of a service member.
- The home buyer must have satisfactory credit, sufficient income, and valid Certificate of Eligibility (COE) confirming their veteran status.
Rural Development Loan Program: This program assists low-income families in obtaining housing in eligible rural areas. Home buyers can reduce the mortgage payment for a short period of time, if eligible. To qualify, a home buyer must:
- Currently have no safe and sanitary housing.
- Be unable to obtain a loan from other resources.
- Occupy the home as a primary residence.
- Be able to take on a loan obligation legally.
In addition to federally funded home buying assistance programs, each state has their own programs designed to encourage homeownership. Here are a few of the opportunities available in the states where Divvy operates:
Georgia Home Buying Assistance Programs
The Georgia Department of Community Affairs (DCA) oversees community housing options and works with local governments, community groups, and landlords across the state to provide access to safe and affordable housing to all Georgians. They offer the following program to home buyers:
Georgia Dream Homeownership Program: This program assists first-time homebuyers by providing affordable mortgage financing and low down payment options. Here are the requirements needed to qualify:
- You must have at least $5,000 for a down payment.
- You must be a first-time home buyer.
- You cannot have owned a home in the last three years.
- You cannot hold liquid assets greater than $20,000 or 20% of the home’s value.
- Your income must not exceed $80,000 for an individual, or $92,000 for a family of three or more people.
Ohio Home Buying Assistance Programs
The Ohio Housing Finance Agency (OHFA) offers affordable mortgage options for low- and moderate-incomes. The OHFA helps first-time homebuyers achieve their dream of owning a home with 30-year, fixed rate mortgages with generous income and purchase price limits. Here are a few of their programs:
- Your Choice! Down Payment Assistance: Helps with down payment and closing costs, allowing a choice of either 2.5% or 5% of the home’s purchase price. The financial assistance provided through this program is forgiven after seven years.
- Ohio Heroes: This program provides down payment assistance and interest rate discounts for veterans, active duty military and reservists (including surviving spouses); police officers, firefighters, EMTs, and paramedics; physicians, nurse practitioners, nurses and STNAs; teachers, administrators and counselors. The financial assistance is forgiven after seven years.
- Grants for Grads: This program provides discounted mortgage interest rates for recent graduates and includes 2.5% or 5% down payment assistance that is forgiven after five years if the homebuyer remains in Ohio.
Texas Home Buying Assistance Programs
The Texas Department of Housing and Community Affairs (TDHCA) offers first-time homebuyers low, fixed interest rates on 30-year mortgages, as well as down payment assistance. Here are a few of their programs:
- My First Texas Home Program: Makes financing available to first-time buyers, veterans, or homebuyers who haven’t owned a home in the past three years. To qualify, applicants need a minimum credit score of 620.
- Texas Mortgage Credit Certificate Program: Offers dollar-for-dollar reduction of federal tax liability for the life of the loan (up to $2,000 per year) for first-time buyers, veterans, or haven’t owned a home in the past three years.
- Veteran’s Exemption: For military veterans, this program allows them to take advantage of the first-time buyer financing and receive an annual tax credit of 20% or 25% of the annual mortgage interest paid.
Tennessee Home Buying Assistance Programs
The Tennessee Housing Development Agency (THDA) oversees the Great Choice Home Loan program designed to provide affordable housing options for middle and moderate income homebuyers.
- Great Choice Home Loan Program: Offers 30-year fixed rate conventional, FHA, VA, and USDA-RD mortgages to homebuyers who have a minimum credit score of 640 and meet an income threshold.
- Down Payment Assistance: Homebuyers can borrow up to 96.5% of the total purchase price and use the Great Choice Plus down payment assistance program for the down payment and/or closing costs. This financial assistance is provided as a second mortgage and has no monthly payments or interest as long as the home buyer owns and lives in the home.
- Homeownership for the Brave: Veterans and active duty service members can qualify for reduced interest rates and zero down payment loans.
Arizona Home Buying Assistance Programs
The Arizona Department of Housing (ADOH) has partnered with the Arizona Home Foreclosure Prevention Funding Corporation (AHFPFC) to assist qualified buyers to purchase a primary residence in targeted housing markets hardest hit by foreclosures.
- Pathway to Purchase Down Payment Assistance: This program provides affordable 30-year, fixed rate mortgage with down payment assistance equal to 10% of the home’s purchase price. The financial assistance comes with no interest and with no monthly payments. It can be forgiven after 5 years.
- Home Plus Program: Provides a 30-year fixed-rate mortgage and down payment assistance from 0% – 5% of the home’s value. This financial assistance can be used toward the down payment or closing costs.
Missouri Home Buying Assistance Programs
The Missouri Housing Development Commission (MHDC) gives first-time homebuyers and qualified veterans an edge to purchase a home with affordable interest rates and down payment assistance.
- First Place Loan Program: Makes it possible for first-time homebuyers to receive discounted interest rates and down payment assistance up to 4% of the loan amount. This financial assistance can be used for a down payment or closing costs and can be forgiven after 10 years.
- Mortgage Credit Certificate (MCC): Gives home buyers an opportunity to reduce the amount of federal income tax owed each year, as long as they continue to own and live in their homes.
Florida Home Buying Assistance Programs
Florida has several programs to help out home buyers. These include programs for first-time buyers and veterans, down payment assistance programs, and affordable financing programs. Here are a few of the options available:
- First Time Homebuyer Program: New home buyers can get a 30-year, fixed rate mortgage with favorable terms. To be eligible, applicants must meet a credit score and income threshold.
- HFA Preferred Grants: Offers a non-repayable grant equal to 3% or 4% of the purchase price of the home, which can be used for the down payment or closing costs.
- Mortgage Credit Certificate Program: Reduces taxes by up to 50% of the mortgage interest paid by the borrower. Applicants must be first-time homebuyers and meet income and purchase-price thresholds.
- Salute Our Soldiers Military Loan Program: Offers military service personnel and veterans lower interest rates and down payment assistance throughout the state of Florida. Down payment and closing cost assistance is available up to $7,500.
Homeownership is so important. However, because homes are getting more expensive, many people have difficulty qualifying for a mortgage to buy a home. If you’re having trouble getting approved but you still want to buy a home, consider Divvy Homes.
With Divvy, you can live in the home and we’ll help you save up so you can buy the home back from us in 3 years or less. Our program helps you automatically save up each month. Learn more about us and sign up here.