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Day 8: Your Character
Day 9: Your Capital
Day 10: Popular Home Loans
Day 11: Ways to Save
Today’s Easy Financial Task: Learn about special homebuying programs.
How to rock this task:
- Read the guidelines for a few low-cost homebuying programs.
- Write down any homebuying programs you’re considering for your next purchase.
- Start researching state-specific housing programs that are available in your area.
Woot woot! We’re at the final day of this week. Give yourself a round of applause!
Today we’re going to dig into some low-cost homebuying programs that are available.
Special housing and down payment assistance programs are typically for low-to-moderate income households that need assistance buying a home. These programs make the dream of homeownership possible for homebuyers who may have trouble buying a home without a helping hand.
You have two tasks today:
- Familiarize yourself with the homebuying programs listed below.
- Research other state and local programs near you.
In this task, we’ll be discussing NACA, Habitat for Humanity, Good Neighbor Next Door, and HUD Dollar Homes. Let’s get started!
You’ve probably heard of NACA before, and are wondering what it’s all about. NACA, or The Neighborhood Assistance Corporation of America, is a non-profit that gives eligible homebuyers the chance to purchase their home with no down payment and no closing costs. The lender takes care of the appraisal fees, transfer taxes, title insurance, and all that good stuff.
Perfect credit isn’t necessary. The program is for low-to-moderate income households and those who are buying in low-to-moderate income communities.
The real beauty of this program is that it offers highly competitive interest rates on 15-year and 30-year mortgages despite the lenient eligibility criteria. There’s also no mortgage insurance required, even with no down payment! (We’ll talk about what mortgage insurance is next week!)
The program can be used for single-family homes, condos, multi-family homes, co-ops, rehabs, and mixed-use property.
Here’s a summary of how the NACA process works:
- Attend a NACA homebuyer workshop. You can look for one here.
- Schedule a meeting with a counselor.
- Choose an agent and notify NACA.
- Start searching for a home.
- Fill out NACA home qualification and mortgage paperwork when you’re ready to buy.
- Close on the home.
This is just an overview of the process. The first two steps — attending a NACA workshop and meeting with a counselor, will give you a better understanding of what to expect from start to finish.
Habitat for Humanity
Habitat for Humanity may be another affordable option to consider, as long as you’re willing to get your hands a bit dirty for a good cause. Homebuyers build their home and receive an affordable mortgage through the Habitat for Humanity program. The money received from these mortgages goes back into building more houses.
To be eligible for Habitat for Humanity, you must:
- Show a need for safe and affordable housing.
- Be willing to build a home and help build other people’s homes that are part of the program.
- Be able to afford mortgage payments.
Good Neighbor Next Door
Good Neighbor Next Door is a unique program for law enforcement officers, teachers, firefighters, and EMTs. The HUD's Good Neighbor Next Door program offers a deal of 50% off the list price of an eligible home for these professionals. There are stipulations and qualifications for the program. The home has to be in a revitalization area and be listed through the program. You also have to live in the home for at least three years. Learn more about the program here.
HUD Dollar Homes
The HUD Dollar Homes program is also available if you earn low-to-moderate income, and you’re willing to live in a neighborhood that needs revitalization. These homes are purchased for $1 each. The purpose of the program is to encourage restoration and occupation of homes in designated neighborhoods that are in need of development. Learn more about HUD Dollar Homes here. *Note: Don’t panic; HUD site is temporarily unavailable during the shutdown! Bookmark this site for future use.*
Local and State Programs
Lastly, there are local and state programs that you should research. Down payment assistance programs can be offered by state or local housing authorities and non-profits. Some programs are geared toward first-time homebuyers, while others allow repeat buyers to participate.
Here are some places to look during your search:
- State Housing Finance Agencies: These organizations are vital to your search and are not difficult to find. Every state has a housing finance agency (HFA). You can Google your state and the words “housing finance agency” and yours should pop up. This is a phenomenal place to start, as your local office can provide free counseling and housing educational courses specific to down payment assistance programs.
- City/County Specific Programs: Researching your city's offerings is also a great place to start, especially if you live in a big city. Again, Google is your friend. Search “housing programs” and your state, city, and county.
- Private Non-Profit Organizations: There are some really good charitable organizations that help people buy their first home. These groups often work with or through your state and local government housing agencies and their approved lenders. You may be able to find these programs on your state’s housing agency website.
After reading an overview of the programs above, your last task for today is to do a bit of research on these programs. Choose a few you may want to consider and search for state and local programs that may benefit you in the homebuying process.
We’ve reached the end of the second week of tasks!
You’re two-thirds of the way through the LRC: Homebuying Edition! Woot woot!
At this point, you should feel more confident in your knowledge of what’s required to buy a home.
Leave a comment below or reach out to your accountability partner(s) if you have any questions. Don’t forget to check into the Dream Catchers: LIVE RICHER group as well.
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P.P.S. Here’s a copy of the Challenge Calendar. It’s a fun way to keep track of your progress.
P.P.P.S. Don’t forget to get your free Live Richer Challenge: Homebuying Edition Starter Kit. Download it HERE.