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First-Time Homebuyer Loans

First-time homebuyers are an increasingly valuable market segment, and many mortgage lenders offer programs tailored towards helping them reach homeownership. These often feature lower down payments, more relaxed credit requirements, and other features that make them attractive options for first-time buyers.

Finding a Mortgage
Before you begin searching for your dream house, get pre-approved with a mortgage lender. This will give you an idea of how much house is within reach and how long it’ll take to pay off the loan. It is best to apply two months or a year ahead of time in order to maximize your options.

The Federal Housing Administration (FHA) offers a selection of government-backed mortgages with attractive interest rates, low down payments and lower closing costs than conventional loans.

FHA loans are an ideal choice for buyers with poor credit scores. They require a down payment as low as 3.5% and have more relaxed credit score requirements than many other mortgage types.

If you are a first-time buyer in New York, the State of New York Mortgage Agency (SONYMA) administers several homebuyer assistance programs that provide mortgages for low to moderate income borrowers. Through participating lenders, SONYMA provides loans with 30-year fixed rate terms and low down payments that typically have 30-year maturities.

No matter if you’re buying a single-family home, co-op or condo, SONYMA can assist in finding the mortgage that fits your situation. Their programs may even offer grants to cover down payment and closing costs as well as interest-free loans or deferred payment options that are refundable when you sell your house.

Special Programs for First-Time Homebuyers
There are various federal and state programs designed to encourage first-time homeowners. These may be tailored toward particular groups such as veterans, teachers and those with limited credit.

Another great source for first-time homebuyer programs is your employer. Many employers provide incentives that can be used for down payments and closing costs, usually as a joint effort between the company and state governments. Therefore, speaking with an HR representative or manager at your workplace will be your best bet in discovering what resources are available in your area.

Employers sometimes match employee contributions to an Individual Development Account (IDA), a savings account designed to aid first-time homebuyers save money for the down payment and closing costs associated with purchasing their first property. These funds can either be deposited by the borrower or transferred directly from their employer once the loan closes.

Some states and municipalities offer first-time homebuyer programs to encourage people from outside their region to relocate there. These may include low down payment requirements, special neighborhoods or low interest rates as incentives.

Ask your local real estate agent or mortgage professional about first-time homebuyer programs available in your area and be sure to familiarize yourself with the requirements. They should be able to inform you on all available options and walk you through the application process.

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