Home loan help for first-time buyers in Georgia

ATLANTA - If you hope to be a first-time home buyer, you might feel discouraged: prices keep rising, interest rates are doubled, and the supply of homes is still very limited. 

The American Dream seems farther away than ever. Is that reality?  FOX 5 real estate expert John Adams has a few ideas to help people looking to buy their first home.

In Georgia, several programs and loan types aim to make homeownership more accessible. A first-time buyer may not have owned a home for the past three years. Most of the loans Adams highlighted on Good Day require that you occupy the house as your primary residence.

The FHA Insured Home Loan Program

One of the most well-known loan programs for first-time buyers is the Federal Housing Administration (FHA) loan. FHA loans are backed by the government and are designed to help individuals with lower credit scores and smaller down payments qualify for a mortgage. With an FHA loan, buyers can put down as little as 3.5% of the purchase price, making homeownership more attainable. And some or even all of that down payment can be from a gift or a down payment assistance program.  Additionally, FHA loans typically have more flexible qualification requirements compared to conventional loans, making them an attractive option for many first-time buyers in Georgia.  Most lenders offering FHA loans will require a minimum credit score of 580.

Because these loans are insured by FHA, there is a charge for FHA Mortgage Insurance, called MIP.  That cost is passed on to the borrower as a monthly fee.

The VA Guaranteed Home Loan Program

Another option for first-time homebuyers is the Department of Veterans Affairs (VA) loan program. VA loans are available to eligible veterans, active-duty service members, and their spouses, and they offer several benefits, including no down payment requirement and competitive interest rates. 

VA loans require no mortgage insurance because they are guaranteed by the VA.  For those who qualify, VA loans can be an excellent way to achieve homeownership with little to no upfront costs.

USDA Home Loan Program

For prospective buyers in rural areas of Georgia, the United States Department of Agriculture (USDA) loan program may be a viable option. USDA loans are designed to promote homeownership in eligible rural and suburban areas and offer 100% financing, meaning no down payment is required. Additionally, USDA loans often have more lenient credit requirements, making them accessible to buyers with less-than-perfect credit histories.

While FHA, VA, and USDA loans cater to buyers with smaller down payments and lower credit scores, conventional loans remain a popular choice for many first-time homebuyers in Georgia. 

Conventional loan programs FNMA and FHLMC

Sometimes called "conforming" loans because they meet the requirements of Fannie Mae and Freddie Mac, conventional loans are not backed by the government and typically require higher credit scores and larger down payments than FHA, VA, or USDA loans. However, there are still conventional loan programs available that offer down payment assistance and flexible qualification requirements for first-time buyers.

Down payment assistance programs

For many would-be borrowers, their greatest hurdle is coming up with the required down payment.

In addition to loan programs, first-time homebuyers in Georgia need to know about down payment assistance programs. One of these is the Georgia Dream Homeownership Program, which offers low-interest rate mortgages and down payment assistance to eligible buyers. 

Through the Georgia Dream program, qualified buyers can receive financial assistance towards their down payment, making homeownership more affordable and achievable.

Other down payment assistance programs available to first-time buyers in Georgia include the Georgia Dream PEN, which provides additional financial assistance to eligible protectors, educators, and nurses. 

Additionally, the Georgia Housing and Finance Authority (GHFA) offers down payment assistance programs tailored to specific counties and regions within the state.

Adams's bottom line is you shouldn't give up. First-time homebuyers in Georgia have a variety of loan options and down payment assistance programs available to them. Whether it's an FHA, VA, USDA, or conventional loan, there are loans designed to accommodate buyers like you with smaller down payments and less-than-perfect credit scores. 

 Additionally, programs like the Georgia Dream Homeownership Program and other down payment assistance initiatives aim to make homeownership more accessible and affordable for folks like you across the state. By exploring these options and working with a smart lender, you can take the first steps toward achieving your homeownership dreams in Georgia.