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Baton Rouge, Louisiana First Time Home Buyer

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Baton Rouge, LA – First Time Home Buyer Programs

In the market to buy your first home? Our Baton Rouge first time home buyer loan programs can help you obtain the financing you need to purchase the home you desire. Our programs offer very competitive terms, including the lowest down payment options for FHA and conventional loans.  We also offer unique home buyer mortgages, including no down payment loans for rural properties, and jumbo loans for large or luxury homes. We have programs to meet almost any type of borrowers home financing needs.

Baton Rouge, Louisiana First Time Home Buyer Loan Programs

  • FHA Loans – Widely popular and considered by many to be the best first time mortgage loan, the FHA is an easy to qualify for loan that offers great terms.  This includes a low down payment requirement of 3.5%, and fair credit is allowed (580 or higher).  There are other reasons for FHA being selected by most first time buyers, such as eligibility for down payment assistance programs, and other appealing incentives.
  • Conventional Loans – A conventional mortgage is any non-government backed loan.  These meet the Fannie Mae conforming loan requirements and are usually chosen by borrowers with good or excellent credit and/or a large down payment.  There are some situations that a conventional mortgage is better even if you are placing a small down payment or using government assistance.
  • USDA Loans – USDA loans are a no down payment loan program available for rural and select suburban area properties.  They are available for very low income, low income, and moderate income borrowers.  In addition to 100% financing, USDA loans are a great choice for many who will not qualify for other types of mortgage loans.  While low income is allowed, you must not have a lot of debt, and a 620 credit score is required.  Want to learn more about USDA loans?  Visit this page.
  • 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.  Baton Rouge is part of the East Baton Rouge Parish, which the FHA loan limits for as follows:  Single unit: $314,827.  Two units: $403,125.  Three units: $487,250.  Four units: $605,525.  For conforming loans, which are used for conventional and VA loans, the maximum loan limits are:  Single unit: $484,350.  Two units: $620,200.  Three units: $749,650.  Four units: $931,600.  If you want to buy a more expensive home, and have the income to qualify, we provide what are known as 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 Buyer Application

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Baton Rouge, Louisiana – Down Payment Assistance Programs

As with most large cities, Baton Rouge has in place three down payment assistance programs with two of them under the umbrella of one organization. Residents seeking to secure a home without needing to belong to a higher income bracket face little resistance.

City of Baton Rouge – Homebuyer’s Assistance Program
Also known as the HAP, Baton Rouge’s main assistance program amount varies from household to household based on HAP’s criteria. As it currently stands, existing and constructed homes outside of the target area can only receive up to $23,000 in assistance while those within the target area may receive up $25,000 to $50,000. Similar to other programs, the financial help is interest free though the remaining total is due back in full should the home be sold. On top of this, $3,000 in grant money from the American Dream Down payment Initiative will be used until exhausted.Qualifications
Those looking for assistance in Baton Rouge must meet all of the following criteria.

  • Eligible properties are required to be located in East Baton Rouge Parish save for those found in the cities of Baker, Central and Zachary.
  • Eligible applicants cannot have owned a home in the past three years unless they qualify as a single parent or displaced homebuyer.
  • All buyers are expected to take and pass a HUD-approved homeownership education course.
  • Awarded applicants are expected to pay 3% of the purchased price using their own funds.
  • During the application process, the applicant is expected to provide proof that they already have down payment funds in either their checking or savings account. Similarly, they must also have at least two months of mortgage payments in their account at the time of closing, excluding the down payment money.
  • Buyers are expected to have held a job in the same field for at least one year and bring in a stable income.
  • The property price cannot go above 80% of the area’s median income based on HUD limitations.
  • Household income includes all money brought in by those in the household that are 18 or older.
  • Buyers must have a credit score of 620 or higher. Unpaid accounts, collections, defaulted student loans and judgements are all terms for ineligibility.

Capital Area Finance Authority (CAFA) – Capital Advantage Program & Capital Area LA-CAFA Grant Program
Overview
Both programs come with their own down payment assistance. In summation, the two options each provide qualified applicants with a 30-year, fixed rate mortgage topped off with a non-repayable grant of 5% with the Capital Advantage or 3% to 4% with the Capital Area of the total mortgage amount. Both are awarded to low and moderate income families within the East Baton Rouge Parish.

Qualifications
For both, the required qualifications are virtually identical.

  • Qualified homebuyers to CAFA are not limited to a first-time homebuyer stipulation. Their income can be no more than 115% of the area’s median income, a total sitting at $76,360 currently, and the home limits are based on the type of loan acquired.
  • Eligible properties must be located within the designated areas, including East Baton Rouge Parish.
  • Capital Advantage requires a few additional limitations, including a minimum credit score of 640, a debt-to-income ratio no higher than 45% and a maximum household income of $76,360. This income amount is subject to change.
First Time Buyer Application

It is easy to get a quote for your first home loan!

Frequently Asked Questions About Buying Your First Home

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, which if you get down payment assistance, only .5% is required.  Conventional loans typically require either 3% or 5%.

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.

How much can I afford to borrow?
The amount that you can borrow depends on your particular loan type and income. There are maximum loan limits which are set at the county level. Conforming loan limits are the maximum lending amount allowed for conventional mortgages. FHA loans have their own loan limits. You can search the maximum loan amount for your county for each particular loan type by entering your zip code (or any zip code for the county you want to buy a home in). This will display the maximum amount available for all loan types. This is not necessarily how much you can borrow though, but the max amount in your location. Your personal limits will be based upon your income and how much debt you have. For instance, with most loans, you can not have a mortgage payment and debts 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.

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.

Can I buy a home after foreclosure?
Most loan programs will require you to wait 3 years before you can buy again after a foreclosure.  There are some instances that you might be able to get an approval in as little as 12 months.  This includes the FHA extenuating circumstances program (more commonly known as the “FHA back to work program”).  If you lost your job due to a job loss or some other event out of your control, you might be able to purchase a home with a FHA loan after only 1 year.

I do not have much credit, can I still get approved?
A 580 minimum is required for a FHA loan. A 620 is required for all others. You may find a lender who can help you if you have poor credit. We do not offer any bad credit mortgage programs

Have more questions about buying your first home?  View our list which covers even more commonly asked questions about buying a home.  Or you can give us a call at 1-800-731-3560.

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