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Aurora First Time Home Buyer Loans

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Aurora, CO – First Time Home Buyer Programs

Are you looking to purchase your first home? Our first time home buyer programs might be the perfect solution to help you obtain the financing you need to purchase the home you desire. We provide excellent home financing options, and encourage you to compare our offered loan terms to other mortgage lenders.

Aurora, CO – First Time Home Buyer Loans

There are 5 types of first time home buyer loans.  You may select different loan terms, such as a fixed rate or adjustable rate mortgage, and the number of years to repay the loan (such as a 30 year fixed rate mortgage).

Types of Mortgages:

  • Conventional Loans – Conventional loans offer the best loan terms to borrowers with good or excellent credit, as well as those who can afford to place a larger down payment.  If you are able to put 20% or more down, you will be able to avoid paying private mortgage insurance (PMI).  However, conventional loans also offer low down payment options, such as programs that only require 3% down.
  • FHA Loans – FHA loans are a good option for borrowers who may not be able to qualify for a conventional loan.  The qualification requirements for FHA loans are much more lenient than conventional loans.  This includes options for home buyers with credit scores as low as 500 (in order to qualify for a 3.5% down payment, you must have a credit score of at least 580).
  • USDA Loans – USDA loans provide home buyers the opportunity to purchase a home without any down payment.  These loans are intended for borrowers with low-to-moderate income.  In addition to not requiring any money down, you can also finance the closing costs into the loan.  This means you can essentially buy a home with no money out of pocket!
  • VA Loans – Active duty military members and veterans can apply for a VA loan which allows you to buy your first home without any down payment.  These loans are not available to the general public, but exclusively to military/veterans.
  • Jumbo Loans – Any loan that does not meet the conforming or FHA loan limits is a jumbo loan.  Aurora is part of Arapahoe County, which has the same conforming and FHA loan limits for as follows:  1 unit: $561,200.  2 units: $718,450.  3 units: $868,400.  4 units:  $1,079,250.  If you want to buy a more expensive home, and have the income to qualify, we provide jumbo loans up to $2,000,000.

The above 5 types of loans are the main first time home buyer options that exist.  We can help you determine which loan is the right fit for you based on your particular needs and eligibility.

First Time Home Buyer Application

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Aurora, Colorado – Down Payment Assistance Programs 

Like many fellow U.S. citizens, Coloradans who want to make the Great American Dream come true, but not everyone has the financial means to come up with the down payment needed for a mortgage. Fortunately, the both local, state, and national government bodies have stepped up to the plate by helping would-be homeowners of modest means have an opportunity to purchase their own home.  Several down payment assistance programs exist in Aurora, Colorado and you may qualify for one of them.

HOAP Offers First-Time Homebuyers New HOPE

The Aurora, CO Home Ownership Assistance Program (HOAP) has a sole mission to make homes affordable for local residents in moderate and low income levels. HOAP does so by lending qualified applicants up to $10,000 at 0 interest for down payment and closing costs for a first home purchase. Below is a list of basic eligibility criteria:

Buyer Eligibility Criteria

  • Mandatory maximum income limits –  Buyers must meet U.S. Housing and Urban Development guidelines for maximum gross income based on household size. HUD policy defines ‘household’ to include minor children, spouses, fiancés, legal or blood kin and non-related boarders who share a single primary residence.  The formula allows $50,350 for the first and adds $7,200 each for up to seven more household members, or gross maximum annual income of $94,350.
  • Limited liquid capital reserves –  Prospective borrowers may not own, have legal access or equitable interest in financial accounts with an aggregate balance that exceeds a certain amount. For latest specific figures and exemptions, contact HOAP directly at the number listed near end of this post.
  • First-time home purchase – Applicants cannot have owned a home during three immediately prior years, as demonstrated by certified copies of at least three past annual tax returns.
  • Financial education – All borrowers must attend at least one free monthly seminar to obtain a financial counseling certificate of completion. Signup by calling HOAP’s automated hotline at 303-739-7966 and follow voice prompts until you receive registration confirmation information.
  • Financial contribution – Buyers must contribute at least one percent of the sales price from personal funds.
  • Exclusive supplemental funding assistance – Buyers may not apply any other third-party funds toward HOAP-assisted home purchases.

Property Eligibility Criteria

  • $302,000 maximum purchase price.
  • Located within Aurora city limits.
  • Zoned as detached single-family dwelling, townhouse or condominium
  • Satisfactory condition documented by a written expert inspection report to verify compliance with applicable health and safety standards, including a
  • Lead Hazard Screen for pre-1978 construction. All repair work must be documented by contractor invoices for labor and receipts for materials or supplies purchased from third-party vendors prior to closing.
  •  Market value is established per mortgage lender appraisal.
  • Owner-occupied on date of initial sales contract. If vacant, seller must prove that former tenant(s) were not displaced.

If you would like to learn more about this program, you can visit the Aurora Colorado government website or speak with a loan representative by contacting us directly.  You can also contact HOAP’s main office in Aurora, CO at (303) 739-7900.

Aurora First Time Home Buyer Tax Credits

The Mortgage Credit Certification (MCC) tax credit provides you an opportunity to reduce your tax bill, as well as enhance your home loan application by reducing your debt-to-income ratios.  How this works, is you can deduct up to $2,000 off your federal tax bill each year.  The MCC allows up to 35% of your annual interest to be eliminated (with the cap being at $2,000).  Some great news, is this can be used in addition to standard mortgage interest deductions!

Frequently Asked Questions 

How much do I need for a down payment?
It depends on the type of loan you want.  USDA and VA loans often will not require any down payment.  FHA loans require a 3.5% down payment.  Conventional loans typically require either 3% or 5%.  If you receive down payment assistance, you may not need any money for your down payment.

What is the maximum loan amount that I can qualify for?
The amount that you will be allowed to borrow will depend mostly on your income, as well as the particular type of loan you are interested in. There are maximum loan limits for each type of mortgage program which are set at the county level. Conforming loan limits are the maximum loan amounts allowed for conventional mortgages.  FHA loans have their own loan limits.  This is not necessarily how much you can borrow though, but the maximum amount allowed in your location.  The amount that you can personal qualify for will be based upon your income, and how much debt you have.  For most loans, your monthly mortgage payment, along with your monthly debts may not exceed 43% of your income.

Can I buy a home without a real estate agent?
It depends on your state and the type of loan program.  For some states, you must use an agent.  In other states, you are not required to use a real estate agent for many loan program, such as conventional mortgages.  However, some loan types require that you use a real estate agent regardless of your location, such as USDA loans.

Do you have first time home buyer loans for bad credit?
Yes, we offer mortgage options for borrowers with bad credit. This includes FHA loans for bad credit, which you can possibly be approved with a credit score as low as 500. However, a 580 credit score is required for the 3.5% down payment. If your credit score is between 500-579, then you will need to put 10% down.

Can I buy a home if I owe tax debt?
For government-backed loans, such as FHA, VA, and USDA loans, you can buy a home with tax debt as long as you have made a payment plan with the IRS, and are not behind on the payments. Any federal debt must be in good standing in order to get a government-based mortgage. If your tax debts have moved into the status of a tax lien, this will prevent you from getting a home loan until it is resolved.

Can I buy a home if I have student loans?
As long as you are not delinquent on the student loan payments, and the monthly payments do not cause excessive debt-to-income ratios, you can still get a mortgage.

Can I buy a home without my spouse?
A common question is if you can buy a house without your wife or husband.  The short answer is yes. There are numerous reasons someone may want to exclude their spouse from a mortgage application, such as lower credit, lack of job history or income, or one spouse having excessive debt that could prevent an approval. You may be able to qualify and get a home loan without your spouse.

How do I know if I am ready and prepared to own a home?
It is critical to consider the often unexpected expenses of buying a home. This includes repairs, maintenance, and of course furnishing the home, monthly utilities, and all other expenses that are associated with homeownership. A common mistake is to just look at the difference in rent to your total mortgage payment. Almost every year, you can expect to have to pay for various upkeep to keep the property functional. This can include anything from repairing a hot water heater that broke, to landscaping, and various maintenance.

Something else financial consultants advise is that you have at least 3 months of reserves. This means that you could afford to make your new mortgage payment for at least 3 months in the event that you lose a job or have some other unforeseen circumstance that the savings would be needed for. This is not a requirement for most home loans, but it is good advice to consider.

Have more questions about buying your first home?  Give us a call at 1-800-731-3560.

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