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Monroe, LA - First Time Home Buyer

First Time Home Buyer Mortgages
Down Payment Assistance Programs

Monroe, LA – First Time Home Buyer Programs

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

Monroe, 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 Ouachita Parish, Louisiana (or any other location) 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 or non-qm loan.  These programs are especially helpful to self-employed borrowers, and a variety of people with credit issues (such as low credit scores and/or a recent bankruptcy, foreclosure, or short sale).  Regardless of your situation, you may want to learn 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.

Monroe, Louisiana – Down Payment Assistance Programs

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

Louisiana Housing Corporation – Market Rate GNMA Program Overview

For those that are restricted in purchasing a home due to income limitations but aren’t in dire financial straits, the Louisiana Housing Corporation offers a special 30-year, fixed rate mortgage program available for VA, FHA or USDA Rural Development mortgages. These are brokered at a promising rate through approved lenders. If approved, up to 4% of the down payment, closing cost and prepaid items may be covered.

Requirements

  • Residences that are eligible can only be single family units.
  • The property must be located in Louisiana.
  • In total, the family’s income cannot exceed 115% of the area’s median income based on where the property is located. This means the amount is variable from city to city. For Lake Charles, as of 2015, this amount was $68,310, however this amount is subject to change.
  • Unlike other down payment assistance programs, this one requires a minimum credit score of 640.
  • Another differentiating factor is the fact that buyers do not have to be first-time homebuyers.

Provided the family meets the income limit requirement, they are then invited to undergo the application process.

  • After selecting a qualified lender, the family must then meet with them to be approved for pre-qualification. Should this happen, the lender then offers advice on affordability of various price ranges.
  • Now that pre-qualification has been met, a home can be searched for through a realtor. This individual will seek out properties that fit the required specifications.
  • Funds are then secured by the lender through the Louisiana Housing Company as the home purchase is finalized and completed.

Louisiana Housing Corporation – LHC Preferred Conventional Program Overview

Though similar to the Market Rate program, the LHC Preferred is great way for homebuyers to obtain down payment assistance on properties that cost more than what is typically mandated by other down payment assistance programs. Considered comparable to an FHA loan, it comes with no up-front mortgage insurance premium, a higher income limit, a higher loan-to-value (LTV) ratio and runs for a period of 30 years. The loan itself can reach up to $417,000 and up to 4% financial assistance can potentially be offered to help with the down payment and closing costs.

Requirements

  • Only single family homes of only one to two units can be purchased so long as at least one of the units is used as the primary residence.
  • Said property must be located in Louisiana.
  • A family’s maximum income cannot exceed $99,000. This number does not fluctuate based on family size, however it is subject to change.
  • The required minimum credit score is 640.
  • For a one unit resident, the LTV is 97%. For a two unit, it decreases to 95%.
  • Though buyers are not required to be first-time homebuyers, those that are new are expect to take a homebuyer education course.

Process

  • As with the Market Rate, applicants must determine their income eligibility before preceding forward with the application process.
  • Once a lender is chosen and met with, the loan application is completed, a credit report is ordered and the family’s pre-qualification for the mortgage is determined.
  • After hiring a realtor and finding a property, the signed purchase agreement is returned to the lender to finish the process.
  • Finally, the lender goes through the Louisiana Housing Corporation to reserve the allocated assistance and all other remaining steps are completed.

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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