Devi Nelson
Senior Loan Officer
Hansen Loans Inc NMLS 239319
NMLS#239880
A Guide To First-Time Home Buyer Programs
Where does a person start when buying a house – trust me when I tell you, it’s normal to have questions, especially if it’s your first home. You might be wondering about some general first time buyer tips, or the best way to get down payment assistance or help with your closing costs.
Be sure to check out our Down Payment Assistance Search Tool
If you have a few minutes to get some answers, read on. Below I'll cover some of the home loans and programs for first-time home buyers, so you know what options are available. Here's the thing about First Time Buyer Programs/Grants in California. Many of these are "Income Based", so if you're making over the Area Median Income you may not qualify. For instance, Home Ready and Home Possible, both First Time Buyer progarms with Freddie Mac/Fannie Mae have income limits (all borrowers combined). Below is an example of how the AMI tool works amd you can find the "tool" here AMI Lookup Tool. Just put in the address of a property and you'll get what you see below. The example below shows the AMI and then breaks it down in various increments. Some programs allow the borrower's income to be 120% of the AMI. But then others such as HomeReady & Home Possible (Fannie/Freddie) cap the applicants to $85,520. So if you lived at 5949 Bounty St San Diego CA and your income (total income of all applicants) exceeds $85,520 you or you and your co buyers will not be eligiable for those programs. It's a good thing we have other programs to offer.
Get StartedClosing costs are additional fees you pay at the end of the mortgage process. Closing costs are typically around 2% – 6% of the total cost of your home loan. Like down payment assistance, closing cost assistance can come through a grant or loan.
You can also look to your seller for help with closing costs, with what are called "Seller Concesions". What that means is the seller will "contribute" some of the proceeds of the sale to help with the Buyer's costs such as Escrow/Title/Appraisal and other fees / costs. They can also help pay for costs to lower your interest rate with a 2 1 Buydown. That said, here's the thing, in a market like we have right now in San Diego there is a LOT of demand and not many homes. Therefore, Sellers are reluctant to give up thier proceeds so as to enable a buyer to qualify. The good news is I can guide you and your Realtor as to what might work. While I'm a RE Broker AND a Mortgage Broker, I've found most RE Agents don't actually know a lot about home loans. They call me when they need help and you should too.
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