Bellevue, WA – First Time Home Buyer Loan 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.
Bellevue 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. Bellevue is part of King County, which enjoys higher FHA loan limits then most of Washington and other states. The 2019 FHA loan limits for King County are as follows: Single unit: $726,525. Two units: $930,300. Three units: $1,124,475. Four units: $1,397,400. For conforming loans, which are used for conventional and VA loans, the maximum loan limits are the same as the FHA limits outlined above. 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.
Bellevue, Washington Down Payment Assistance Programs and Grants
Situated just east of Seattle and within sight of the majestic Mt. Rainier sits Bellevue, the tech leader of Western Washington. Though home to such industry giants as Vale Corp, Nintendo and Microsoft, it nevertheless caters to the needs of its lower income residents. By preserving specific apartments, homes and condos, the area continues to assist the government in being able to provide low- to medium-income families places that they can call their own through a program that helps individuals with down payment assistance.
Also known as A Regional Coalition for Housing, ARCH is an enormous partnership of numerous counties in Washington, including Bellevue. Beyond assisting those looking for affordable housing, they work with local governments to develop policies, programs, strategies and development regulations to foster a collection of properties that are available solely for those that don’t make a lot of money.
ARCH is able to do their duty mainly through their Housing Trust Fund. This is how ARCH awards grants and loans to developments that build affordable housing. As of today, they have funded over 2,575 units around the Bellevue area.
Homebuyers looking for residences sold at restricted prices do not have to be a member but they do have to follow a certain set of guidelines and join the mailing list.
- Interested buyers must successfully complete a Washington State Housing Finance Commission endorsed homebuyer education class. Once finished, the certificate must be mailed to ARCH so that interested parties can then be placed on the ARCH mailing list.
- Any home purchased must be occupied by the owner.
- Resale prices in the future are formula-based. This number is based on one of three indexes, including the REI Seattle/Everett Real Estate Report, the Consumer Price Index-housing (CPI) and an average of the REI and HUD median income for King County.
- Top priority is given to potential buyers that have incomes at or below current income guidelines.
- Should the owner plan to sell their home, the city has the initial right to either refuse to buy the property or assign it to a different buyer. This may be waived should too much time pass. Even so, the city still retains the right to approve any sale.
- The resale control agreement will be waved if there is a default and the mortgage is then assumed by the lender.
- Resale prices may go up if home improvements have been performed. The opposite is also true in that the resale price can decrease if the home has not been cared for.
Interested parties are encouraged to start the process of looking for affordable housing through ARCH by filling out an application. Once completed with the education class certificate turned in, they are added to the mailing list and sent regular notifications of affordable apartments to rent or homes now on the market.
House Key State Bond
Provided the individual qualifies for ARCH and manages to find a home, it’s now time to manage the financial aspect of the home buying process. In order to keep this affordable every step of the way, ARCH purchases automatically comes with a down payment assistance with the first mortgage loan program known as House Key State Bond.
House Key Plus ARCH is part of the Washington State Housing Finance Commission, a statewide team dedicated to helping make homes affordable for those less fortunate. In order to be approved for a bond, a future homeowner must successfully complete a homebuyer education seminar and meet with a commission-trained loan officer to determine just how much assistance they qualify for. Once completed, they can begin house hunting in earnest.
- Up to $30,000 in aid with no monthly payments.
- Low simple interest of 4%.
- Loan balance due only if borrower sells home, pays off first mortgage or refinances.
- The buyer’s income cannot be larger than $46,100 for a one person household, $52,650 for two people, $59,250 for three people and $65,800 for four.
- The home purchased cannot cost more than $354,000 and must be price restricted.
- The owner must use their new home as their primary residence.
- If this is a buyer’s first residence, they cannot have at any time in the past three years have owned a home.
- If the property is already occupied, the tenant cannot be displaced.
- The buyer has to qualify for the House Key State Bond.
- They must also attend a pre-purchase counseling session and a home education seminar.
Bellevue 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 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.
Have more questions about buying your first home? Give us a call at 1-800-731-3560.