If you are a First Time Home Buyer or want to buy a home with little or no money down, here are a few mortgage programs available to choose from in New Hampshire.
Rural Development Loan (RD Loan) program from The US Department of Agriculture
The USDA offers a program called the RD or Rural Development loan. The loan is guaranteed by the USDA, and allows homebuyers to purchase with zero money down. The only real downside to this program is that you can’t live in a city or a densely populated town. Most areas outside of cities are eligible for this program. The USDA has a website that you can look up to see if the town and home you want to buy are eligible for this program.
Since the RD program is a no-money-down program, the only money you may need is for closing costs and expenses. If you structure the offer you make on a home properly, a portion or all of those costs can be paid by the Seller.
Many people, and even some lenders, consider the USDA program difficult to work with. It really isn’t! You just need to know what the rules are. The program is designed for moderate to lower income homebuyers so there are income limits. However, these limits are relatively high for the majority of potential home buyers. The USDA also requires that the property be in good condition. These standards are to ensure that you are buying a home that does not need any major repairs and does not pose any hazards to you as a buyer. Who doesn’t want a safe home?
Another no-money-down program is the Veterans Affairs (VA) loan program. While this zero cash down program is a wonderful program, it is only open to Veterans and their spouses. A Veteran has to have a certificate of eligibility to see if they are eligible to use this program and to determine how much they are eligible for. The VA guarantees the loan to a certain amount for the lender which in turn enables the lender to allow the borrower to put $0 down when they are purchasing.
The VA and RD loan programs are similar in that both allow zero money down and allow the Seller to pay closing costs and pre-paid expenses. Both programs have minimum property standards that help protect the home buyer from purchasing a bad property. Unlike the RD program, the VA does not have any restrictions regarding where a veteran can buy a property.
FHA Loans from the Federal Housing Administrations program
There are very few low down payment programs that work as well as the 3.5% down FHA program. The program is similar to the RD and VA programs. The main highlights of this program are:
• No geographic restrictions like RD
• No income limits
• Closing Costs and Expenses can be paid by the Seller up to 6%of the purchase price
• Reasonable property standards to protect the Buyer and FHA
• Program has provisions for a non-occupant co-signer
• Blemished credit does not disqualify the borrower
• Higher debt to income ratios allowed to help borrowers qualify
• Down payment can come from a Gift or from a retirement account
• Program allows the purchase of 1-4 family properties
FHA-NHHFA. That’s FHA combined with New Hampshire Housing Finance Authority Cash Assistance Grant
If you don’t want to live in a rural area, are not a veteran, and don’t have quite enough money for the 3.5% down payment with FHA, there is the FHA-NHHFA program. The FHA-NHHFA program offers a 3% Cash Assistance Grant from NHHFA (New Hampshire Housing Finance Authority). If the Seller agrees to pay all the Closing Costs and Pre-paid expenses, you could purchase a home with a little a ½% down.