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Baton Rouge, LA - First Time Home Buyer

First Time Home Buyer Mortgages - Down Payment Assistance Programs

Baton Rouge, LA – First Time Home Buyer Programs

Are you a first time home buyer looking to purchase a home in Baton Rouge, Louisiana?  On this page you can learn about some of the different types of mortgage programs that are available to first time home buyers.  You may also view down payment assistance programs that are currently being offered in Baton Rouge, LA.

Baton Rouge, LA – First Time Home Buyer Loans

Below are some mortgage programs that are available to first time home buyers.

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 rural 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 mortgage that does not meet the conforming loan limits is a jumbo loan.  You can lookup the 2020 conforming loan limits for East Baton Rouge Parish, Louisiana (or any other county) using this conforming loan limits calculator.  If you want to buy a more expensive home, and have the income to qualify, jumbo lenders offer loan amounts up to $5,000,000.
  • Non-Prime Loans – If you do not qualify for any of the above types of loans, you may consider a non-prime loan.  These programs are helpful to people with a variety of credit issues (such as low credit scores, or a recent bankruptcy).  Non-prime loans do not require any waiting periods after a bankruptcy, and most non-prime lenders allow credit scores as low as 500.  Regardless of your situation, you may consider learning more about non-prime loans if you do not qualify for any of the other types of mortgages featured above.

These are some of the mortgage options that are available to first time home buyers. 

Would You Like to Get Pre-Approved for a Mortgage?
Click Here to Get Pre-Approved for a Home Loan

Upon receiving your request, we will match you with a mortgage lender that offers first time home buyer loans in Louisiana.  You will be provided with a free consultation, and the opportunity to get pre-approved for a mortgage.

Baton Rouge, Louisiana – Down Payment Assistance Programs

First time home buyers in Baton Rouge may be eligible to receive down payment assistance.  You can learn more about some down payment assistance programs being offered in Baton Rouge below.

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.

Are You Eligible for Down Payment Assistance?

A mortgage specialist can help you check your eligibility for down payment assistance.  If you would like to receive some help checking what down payment assistance programs you may be eligible for, fill out this form.  We will match you with a mortgage lender that can help you see if you qualify for any down payment assistance.

 

First Time Home Buyer Questions 

Below are some of the most frequently asked questions about first time home buyer loans:

How much do I need for a down payment?
The minimum down payment requirement will depend on the type of mortgage program.  USDA and VA loans do not require any down payment.  FHA loans only require a 3.5% down payment (and allow down payment assistance to be used).  Conventional loans typically require either 3% or 5% down.   The minimum down payment for a non-prime loan is usually at least 10% (or higher).

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.

Are there mortgage loan options for borrowers with bad credit?
Yes, both FHA loans and non-prime loans are available to borrowers with lower credit score, and other credit challenges.  The minimum credit score required for an FHA loan is 500.  For non-prime loans, there are lenders that allow a borrower to have a credit score even below 500.  Non-prime loans also do not have any waiting periods after a bankruptcy.

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 find out if I qualify for a mortgage?
A loan representative can help you determine what mortgage programs you may qualify for, and also check your eligibility for down payment assistance.  If you would like to receive a free consultation, we can help match you with a mortgage lender that offers first time home buyer loans in Louisiana.

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