Commerce City, CO – First Time Home Buyer
In the market to buy your first home? Our Commerce City first time home buyer mortgage loans 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.
Commerce City 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. Commerce City is part of Adams County, which the FHA loan limits for as follows: Single unit: $529,000 Two units: $677,200. Three units: $818,600. Four units: $1,017,300. For conforming loans, which are used for conventional and VA loans, the maximum loan limits are the same as the FHA loan limits. 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.
Commerce City, CO – Down Payment Assistance Programs
Commerce City, Colorado began as a humble trading post back in 1859. Through the years, it has served as a stop along the way to California for gold seekers and a major agricultural hub. Eventually, however, an oil refinery moved in and became the major economic focal point, capable of producing 90,000 barrels each day. Beyond this, the city is known for its Dick’s Sporting Goods Park where it hosts the Colorado Rapids soccer team. Though a small but happy town, Commerce City has a higher number of down payment assistant programs than many of the larger cities in Colorado.
Adams County Housing Authority
Through the county Commerce City is located in, residents can apply for down payment and closing cost assistance. This money is loaned to eligible families in the form of a second mortgage, however, there are no monthly payments due on it. Instead, the loan is forgiven by the county every year that the house remains occupied without any additional interest. Given enough time, the loan is entirely forgiven. That being said, there are a few situations when the loan must be paid back. These include:
- The house is sold.
- The property is transferred.
- The first mortgage is fully paid off.
- The home is no longer occupied as a primary residence.
These, of course, no longer apply provided the loan waiving terms have already been reached.
Because first-time homebuyer income eligibility is for those that make 80% or less of the area’s median income, the exact income amounts are continually in fluctuation. They also shift based on the number of people in the household itself. Other requirements include:
- The applicants must be first-time homebuyers.
- All homes and properties in question must be in Adams County.
- Homebuyers have to attend the provided First Time Homebuyers education class.
- The mortgage must be at or below the current purchase guidelines.
- Twenty percent of the loan is forgivable each subsequent year of living in the house. It is entirely forgiven after five years.
- The amount of aid is equal to 5% of the purchase price or closing amount.
- Borrowers have to be able to pay at least 1% of the purchase price.
- This loan must be re-certified every year the property is inhabited.
Metro Mortgage Assistance Plus Program
For residents that want assistance from the city, there are two options. The first is the Metro Mortgage Assistance Plus Program, a program administered by Denver. This helpful option offers eligible residents a competitive 30-year fixed-rate mortgage grant that totals out to 4% of the total mortgage amount.
To qualify, there are a few requirements that must be followed.
- The property has to be used as the buyer’s primary residence, however the buyer does not have to be a first-time homebuyer.
- Families with two or fewer members have to earn less than $91,000 while families with three or more have to earn less than $103,000.
- The debt-to-income ratio has to be less than 45%.
- A minimum FICO score of 640 is expected.
- Approved buyers have to be able to pay 0.5% of the total mortgage with their own money to go toward closing costs.
- An HUD approved home buyer’s course must be attended and successfully completed.
Commerce City Housing Authority Homebuyer Program
The second of the city’s programs is one designed specifically for first-time homebuyers. Unlike the Metro Mortgage, this program’s requirements are a bit more relaxed, with interested parties only needing to complete a Colorado Housing Finance Authority approved buyer course prior to applying.
Once completed, applicants are eligible to apply for assistance in the form of a second mortgage for a period of 10 years. This loan allows for up to $10,000 to be borrowed to pay down payment and closing fees. The interest rate is currently 3.5%. All minimum incomes are based on the HUD’s maximum gross income limits and shift based on the total number of members in the family.
Borrowers are expected to obtain a full mortgage on their own and cannot have been listed as having owned any type of property in the past three years. They must also pay 1% of the total mortgage using their own money to cover the cost. As for the property, its final cost cannot be more than what it was appraised to be. It must be situated in Commerce City and has to undergo an inspection by a certified professional to verify it is safe and habitable.
Commerce City 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.
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.