If you are considering buying your first home, you may need some assistance beyond simply going to a commercial bank and applying for a home mortgage loan.
According to Nerdwallet, the average down payment expected for a home loan through a bank is 20 percent. For many first-time homebuyers, that is simply too much. Even if you get into a program that reduces your down payment, many families do not have even 3 percent of the desired mortgage in savings.
Another potential problem for many first-time homebuyers is if their credit rating is not perfect.
In order to find out more about programs that can help first-time homebuyers get a mortgage in Galveston, Texas, we spoke to Chenoa Fund representatives. Chenoa is an approved government mortgage lender that specializes in helping consumers not only get an FHA loan, but also obtain either a second mortgage or grant that will cover the down payment.
Programs for First-Time Homebuyers in Galveston –
Federal Housing Authority Loans –
FHA loans help homebuyers who have credit scores as low as 500 points who can come up with 3 to 10 percent as a down payment and meet income requirements. The idea behind these federally-guaranteed loans is to make more U.S. citizens homeowners.
FHA loan requirements allow homebuyers to obtain their down payment as a loan, grant or gift. One does not apply to the FHA for the mortgage loan, but through an approved FHA provider, like Chenoa Fund.
City of Galveston Homebuyer Assistance Program –
Galveston residents can receive a grant of up to $14,500 through the city’s Homebuyer Assistance Program that they can apply towards a down payment on a mortgage and/or closing costs.
The home must be within the city limits and meet U.S. government Housing and Urban Development quality guidelines. The loan must pass underwriting requirements, and the borrower must meet minimum income requirements and qualify for the loan.
City of Galveston Neighborhood Stabilization Program Funding –
Rather than allow foreclosed homes to sit unused, the city has purchased some of these homes, using a HUD block grant, rehabs them and sells them to low- to moderate-income homebuyers. Income requirements are really modest for these loans.
Galveston Housing Authority Housing Choice Voucher Program –
For potential first-time homebuyers who are currently receiving apartment rental vouchers in order to supplement their ability to afford their rent each month, the Galveston Housing Authority has a program that allows renters to transition to homeowners.
Renters must earn at least $15,000 per year, have been employed full-time for over a year and meet certain credit guidelines as well as attend training courses on credit and on homeownership. If they don’t currently meet the credit guidelines, they receive credit counseling in order to work toward the program requirements.
The new homeowner must pay 30 percent of their income towards their mortgage each month, and the housing voucher will make up the shortfall.
If you are interested in any of these programs or one of the other similar programs that exist to help first-time homebuyers in the Galveston area, contact Chenoa Fund. They can help you navigate through these programs and others to get into your first home