Greeley, CO – 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.
Greeley 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. Greeley is part of Weld County, which the FHA loan limits for as follows: Single unit: $385,250. Two units: $493,200. Three units: $596,150. Four units: $740,850. 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.
Greeley Down Payment Assistance Programs and Grants
Even as one of the top 20 most populated cities in Colorado, Greeley remains a reserved, quiet town located along the Front Range Urban Corridor. Founded in 1859, it was started as a utopian society, however this experiment did not last long. While a predominantly agricultural center, it nevertheless managed to keep up with electrical inventions, welcoming electricity and automobiles. As of today, its major hub of jobs is the University of Northern Colorado. Yet even with such a large population for the state, its down payment assistance programs are surprisingly limited. Below are the only two DPA programs exclusive to Greeley. The good news, however, is Greeley is eligible for several down payment assistance programs that are available statewide.
Greeley Home Ownership Program for Employees
Otherwise known as G-Hope, this pilot program was established to promote home buying around UNC’s campus. However, it is only available to the participating major employees of the city, including the City of Greeley, School District Six, the University of Northern Colorado and Banner Health/NCMC.
Provided the interested borrower is employed by one of these companies, the remaining requirements aren’t out of the ordinary in terms of down payment assistance.
- It only applies to single-family homes, and the home must be used as the primary residence.
- The property must be located within the Redevelopment District or the University District.
- Only one loan per household per employee per lifetime may be awarded.
- The borrower has to contribute no less than $1,000 of their own money toward the mortgage.
- Unlike other DPA programs, there is no income limit with G-Hope. Instead, buyers have to qualify for a government or conforming loan to complete the purchase.
- The loan assistance provides different amounts based on the location of the house. Borrowers receive $2,500 if the home is anywhere in either district, $4,000 if it is on or east of 11th Avenue and $6,000 if it is on or east of 8th Avenue.
- Whatever amount is awarded carries with it a 0% APR that steadily decreases by 20% each year for five years. Following the fifth year, the loan is entirely forgiven. At this point, the home can be sold and the money will not need to be repaid.
Colorado Housing Assistance Program
For more assistance, potential buyers can look to the CHAC. Their organization provides flexible loans with low interest to low- to moderate-income families. It is processed as a second mortgage and is repaid on a monthly basis, however, the start date for repayment can vary. Borrowers are also expected to be able to pay $1,000 of their own money to cover general mortgage fees.
To begin the application process, borrowers must first attend a CHAC approved home buyer class. This is required and non-negotiable. Following this, an application for assistance can then be filled out. Successful applicants are expected to adhere to certain guidelines.
- The borrower cannot have owned a property in the past three years.
- The property must be inhabited as a primary residence. Should it not be used this way, the loan will be due back in full plus any accumulated interest immediately.
- Full disclosure of assets and income of every person that will be living in the home has to be given.
- At closing, no money back is provided.
- Should the borrower pay off the entire first mortgage, the remaining amount on the CHAC loan will be due.
Greeley 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.
Have more questions about buying your first home? Give us a call at 1-800-731-3560.