First time homebuyer loan options


Can anyone recommend any 30 year fixed rates loans for a first time homebuyer with 700+ credit, but who makes ~$37,000 annually? Is there a low income loan I qualify for that carries a better rate or any type incentive program that would bring costs down?

Is FHA the way to go or how about the DC Bond program? Are there any advantages or disadvantages - meaning the building is a rehab, are there any loans or incentives geared towards rehabbing? I’m looking to buy a house for 175k right inside DC. I’m thinking about laying 20% down, but curious if 5% is a better option. Any assistance is appreciated.

Most banks will not allow money to go toward fixing up the property anymore. They used to allow rolling in repair costs, but not so much anymore. Depending on your debt to income ratio, some banks will require more down depending on your debt. It will be better to put more down to ensure a better rate. I hope this was helpful. Plus, you can ask these same questions from your mortgage broker or bank representative because each bank is different.

You might also want to look at buying properties that the seller of the property will finance for you. This will limit your selection, but there are a lot of good quality properties and investors that are willing to extend this credit to you with the credit history that you have. Good luck.

Herman, good point. I wasn’t thinking clearly. Seller financing or lease option are great ways to get into a home without using your own credit or money. But if you are looking for a short sale or REO deal, then speak with your mortgage broker about the different programs available to you.

if you are looking at buying a short sale or from a wholesaler and you want to use FHA, you may run into seasoning issues. Also, it’s always been my philosophy of putting the least amount down and keeping the rest in the bank, especially in these economic times. You never know when you’re gonna need that money. Financing 80% versus 95%, will give you a lower payment, but the difference won’t make or break you. Just my opinion though. Youve got a strong fico, but i dont know what you’re debt to income is. I know bank of america has a program that will pay all your closing costs if you can qualify. I would try them as well as a local mortgage broker.

Ask your broker about the FHA 203k. It is a rehab loan for homeowners who wish to purchase property and finance the rehab costs.

From the info you presented FHA 203k streamline is the way to go. Just make sure your client has open trade, DTI under 50, and seasoned funds and/or assets. FHA 203k requires you to bring 3.5% down, finances repairs up to $35k (Minimum $15k), and property must be in livable condition.


203K are few and far between these days. If the escrows are not too expensive you might just ask the seller to raise the price of the house a bit and put the money into an escrow account and just use a straight FHA loan.