first time buyer programs – The Real Estate Beat

First Time Home Buyer Loan Programs

Happy New Year!

I wanted to share this article about loan programs becuase owning your own home is a goal near and dear to my heart. If you’re looking to make homeownership your goal – contact The Caton Team – we love what we do and we love helping people achieve their goal of homeownership!

Summary: First-time homebuyer loans and programs

FHA loan program: A loan insured by the Federal Housing Administration. Good for those with low credit scores and little money saved for a down payment.
USDA loan program: A loan program 100 percent guaranteed by the U.S. Department of Agriculture for lower-income borrowers in eligible rural areas.
VA loan program: A loan backed by the U.S. Department of Veteran Affairs that allows no down payment for military personnel, veterans and their families.
Good Neighbor Next Door buyer aid program: A HUD program that provides housing aid for law enforcement officers, firefighters, emergency medical technicians and teachers.
Fannie Mae or Freddie Mac loan program: Conventional loans backed by Fannie Mae or Freddie Mac require 3 percent down. Good for those with strong credit.
HomePath ReadyBuyer Program: A program that provides 3 percent in closing cost assistance to first-time buyers. Must complete an educational course and buy a foreclosed Fannie Mae property.
Energy-efficient mortgage program: Backed by FHA or VA loan programs and allows borrowers to combine the cost of energy-efficient upgrades onto a primary loan upfront.
FHA Section 203(k) loan program: Borrow the funds needed to pay for home improvement projects and roll the costs into one FHA loan with your primary mortgage.
Local first-time homebuyer programs and grants: Many states and cities offer first-time buyer programs and grants for down payment or closing cost assistance.
Native American Direct Loan: This VA-backed program provides direct home loans to eligible Native American veterans to buy, renovate or build homes on federal trust land.

1. FHA loan

Best for: Buyers with low credit and smaller down payments.

Not having enough money for a 20 percent down payment may deter you from buying a home, but it shouldn’t. Insured by the Federal Housing Administration, FHA loans typically come with smaller down payments and lower credit score requirements than most conventional loans. First-time homebuyers can buy a home with a minimum credit score of 580 and as little as 3.5 percent down or a credit score of 500 to 579 with at least 10 percent down.

FHA loans have one big catch called mortgage insurance. You’ll pay an upfront premium and annual premiums, driving up your overall borrowing costs. Unlike homeowners insurance, this coverage doesn’t protect you; it protects the lender in case you default on the loan.

Learn more about finding the best FHA lender for you.

2. USDA loan

Best for: Borrowers with lower or moderate incomes purchasing a home in a USDA-eligible rural area.

The U.S. Department of Agriculture, or USDA, guarantees loans for some rural homes and you can get 100 percent financing. This doesn’t mean you have to buy a farm or shack up with livestock, but you do have to buy a home in a USDA-eligible area.

USDA loans also have income limits based on where you live, meaning they’re geared toward folks who earn lower to moderate incomes. Typically, you need a credit score of 640 or higher to qualify for a streamlined USDA loan. If your score falls short, you’ll have to provide extra documentation on your payment history to get a stamp of approval.

3. VA loan

Best for: Active-duty military members, veterans and their spouses.

Many U.S. military members (active duty and veterans) are eligible for loans backed by the U.S. Department of Veterans Affairs, or VA. VA loansare a sweet deal for eligible borrowers because they come with lower interest rates than most other loan types and require no down payment. A funding fee is required on VA loans, but that fee can be rolled into your loan costs and some service members may be exempt from paying it altogether.

Other VA loan perks include no PMI or minimum credit score. If you struggle to make payments on the mortgage, the VA can negotiate with the lender on your behalf to take some stress from the equation.

4. Good Neighbor Next Door

Best for: Teachers, law enforcement, firefighters and emergency medical technicians.

The Good Neighbor Next Door program is sponsored by the U.S. Department of Housing and Urban Development (HUD). It provides housing aid for law enforcement officers, firefighters, emergency medical technicians and pre-kindergarten through 12th-grade teachers.

Through this program, you can receive a discount of 50 percent on a home’s listed price in regions known as “revitalization areas.” Using the program’s website, you can search for properties available in your state. You must commit to living in the home for at least 36 months.

5. Fannie Mae or Freddie Mac

Best for: Borrowers with strong credit but minimal down payments.

These government-sponsored enterprises, or GSEs, set borrowing guidelines for loans they’re willing to buy from conventional lenders on the secondary mortgage market.

Both programs require a minimum down payment of 3 percent. Homebuyers also need a minimum credit score of 620 (or higher, depending on the lender) and a relatively unblemished financial and credit history to qualify. Fannie Mae accepts a debt-to-income ratio as high as 50 percent in some cases. You’ll still pay for PMI because you’re putting less than 20 percent down, but you can get it canceled once your loan-to-value ratio drops below 80 percent.

6. Fannie Mae’s HomePath ReadyBuyer Program

Best for: First-time homebuyers who help for closing costs willing to buy a foreclosed home.

Fannie Mae’s HomePath ReadyBuyer program is geared toward first-time buyers interested in foreclosed homes that are owned by Fannie Mae. After taking a required online homebuying education course, eligible borrowers can receive up to 3 percent in closing cost assistance toward the purchase of a HomePath property. The trick is finding a HomePath property in your market, which might be a challenge since foreclosures account for a smaller chunk of listings today.

7. Energy-efficient mortgage (EEM)

Best for: Homebuyers who want to make their home more energy-efficient but lack up-front cash for upgrades.

Making a home more energy efficient is good for the environment, and good for your wallet by lowering your utility bills. Making green upgrades can be costly, but you can get an energy-efficient mortgage, or EEM loan, that’s insured through the FHA or VA programs.

An EEM loan lets you tack the cost of energy-efficient upgrades (think new insulation, a more efficient HVAC system or double-paned windows) onto your primary loan upfront — all without a larger down payment.

8. FHA Section 203(k)

Best for: Homebuyers interested in purchasing a fixer-upper but who don’t have a lot of cash to make major home improvements.

If you’re brave enough to take on a fixer-upper but don’t have the extra money to pay for renovations, an FHA Section 203(k) loan is worth a look.

Backed by the FHA, the loan calculates the home’s value after improvements have been made. You can then borrow the funds needed to pay for home improvement projects and roll the costs into one loan with your primary loan amount. You’ll need a down payment of at least 3.5 percent, and improvements must cost more than $5,000.

9. State and local first-time homebuyer programs and grants

Best for: First-time homebuyers who need closing cost or down payment assistance.

In an effort to attract new residents, many states and cities offer first-time homebuyer grants and programs. The aid comes in the form of grants that don’t have to be repaid or low-interest loans with deferred repayment to cover down payment or closing costs. Some programs may have income limits, too. Before buying a home, check your state’s housing authority website for more information.

Contact a real estate agent or local HUD-approved housing counseling agency to learn more about first-time homebuyer loans in your area.

First-time homebuyer programs by state:

10. Native American Direct Loan

Best for: Eligible Native American veterans wishing to buy a home on federal trust land.

The Native American Direct Loan provides financing to eligible Native American veterans to buy, improve or build a home on federal trust land. This loan differs from traditional VA loans in that the VA is the mortgage lender.

The NADL has no down payment or private insurance requirements, and closing costs are low. And you’re not limited to only one property; you can get more than one NADL. Not all states are eligible, though.

Learn more:

I read this article at: LOAN PROGRAMS

Got Real Estate Questions? The Caton Team is here to help.

We strive to be more than just Realtors – we are also your home resource. If you have any real estate questions, concerns, need a referral or some guidance – we are here for you. Contact us at your convenience – we are but a call, text or click away!

The Caton Team believes, in order to be successful in the San Fransisco | Peninsula | Bay Area | Silicon Valley Real Estate Market we have to think and act differently. We do this by positioning our clients in the strongest light, representing them with the utmost integrity, while strategically maneuvering through negotiations and contracts. Together we make dreams come true. How can The Caton Team help you?

A mother and daughter-in-law team with over 35 years of combined, local Real Estate experience and knowledge – would’t you like The Caton Team to represent you? Let us know how we can be of service. Contact us any time.

Call | Text | Sabrina 650.799.4333 | Susan 650.796.0654

Email | Info@TheCatonTeam.com

The Caton Team – Susan & Sabrina
A Family of Realtors
Effective. Efficient. Responsive.
What can we do for you?

Want Real Estate Info on the Go? Download our FREE Real Estate App: Mobile Real Estate by The Caton Team

Berkshire Hathaway HomeServices – Drysdale Properties

DRE # |Sabrina 01413526 | Susan 01238225 | Team 70000218 |Office 01499008

The Caton Team does not receive compensation for any posts. Information is deemed reliable but not guaranteed. Third party information not verified.

First-Time Home Buyer Workshop – Get to know the HEART – 5% Down Payment Loan Program for San Mateo County

* If you cannot attend the workshop, please do not hesitate to contact The Caton Team. We’d be more than happy to help you.*

Call | Text | Sabrina 650.799.4333 | Susan 650.796.0654

Email | Info@TheCatonTeam.com

Are you a First-Time Home Buyer?

Does saving 20% for the down-payment seem daunting?

Does paying Private Mortgage Insurance (PMI) frost your cookies?

Then you need to learn about the HEART LOAN of San Mateo County and this workshop is a must!

Get to know the HEART San Mateo County Loan Program – on Wednesday October 30, 2019 at the San Carlos library.

If you’re buying your first home in this market, you know how painfully hard it is to save for the 20% down-payment. Must banks require 20% and anything less requires expensive and pointless Private Mortgage Insurance (PMI). Well the HEART loan – Housing Endowment and Regional Trust of San Mateo is here to help. They are offering 5% down with NO PMI. You carry a 30 year, 80% 1st mortgage and a 15 year ,15% 2nd mortgage. This loan covers single family homes, condos and townhomes anywhere in San Mateo County for a vaule up to $908,156.

The Caton Team has helped several families get into their first home with the HEART program through Meriwest.

For more information – HEART and Meriwest are hosting a FREE loan workshop at the San Carlos library at 6pm on Wednesday October 30th. Register Here.

Buying and Selling Real Estate doesn’t have to be scary – contact The Caton Team at any time for more information. We love what we do and would love to help you!

Call | Text | Sabrina 650.799.4333 | Susan 650.796.0654

Email | Info@TheCatonTeam.com

For more information or to Register – click here.

Screen Shot 2019-10-09 at 9.49.24 AM.png

Got Real Estate Questions? The Caton Team is here to help.

Call | Text | Sabrina 650.799.4333 | Susan 650.796.0654

Email | Info@TheCatonTeam.com

The Caton Team – Susan & Sabrina
A Family of Realtors
Effective. Efficient. Responsive.
What can we do for you?

Want Real Estate Info on the Go? Download our FREE Real Estate App: Mobile Real Estate by The Caton Team

Berkshire Hathaway HomeServices – Drysdale Properties

DRE # |Sabrina 01413526 | Susan 01238225 | Team 70000218 |Office 01499008

The Caton Team does not receive compensation for any posts. Information is deemed reliable but not guaranteed. Third party information not verified.

1st-Time Buyers Losing to Investors – tell me something I don’t know….

If you are a home buyer in todays real estate market on the SF Peninsula – then you already know! Cash buyers have come out in force and it feels like they are scooping up every house on the market.

Below is an article I read in the SF Chronicle. It hit home hard. The Caton Team has been writing offers, sometimes multiple offers for one client on several properties praying one will be accepted. This market is nuts. And before I hear anyone say – you must love it! NO! Realtors do not like this type of market. We are human. We may perform some superhuman stunts from time to time – but we are human. Realtors like stable markets with consistent growth. Not manic markets – with ” one open house and offers are due on Monday” – markets. If I am feeling the rush – I know my clients are – and for them – this is a new experience. For the Caton Team – with over 25 years combined experience, this is just another day on the job.

So as you venture and read this article – I must add my two cents. DO NOT GIVE UP! Giving up and not getting an offer accepted has the same results – not keys to your new home. But dusting yourself off and getting back on the horse to meet your Realtor at lunch to see the next new listing – now that’s tackling this market like a pro! In our experience, buyers who are dedicated to becoming owners will get a house. It may not be the house they dreamt about. It may not have all the bedrooms they wanted or the yard they liked – but you can make all those things happen – once you get your house. Curious what the Caton Team does differently for our clients – come on and and let’s talk! Questions – email me at Info@TheCatonTeam.com

Enjoy!

1st-time buyers losing to investors

Many outbid by absentee owners in a rapidly rising market

By Carolyn Said

Hunter Mack and Nyree Bekarian are eager to buy a home for their growing family. They started looking when their son Emmett was a year old. Now he’s 2 1/2, and they have a second child due any day. And they’re still looking.

After seven years of marriage, Carlos and Robin Mariona felt the time was right to buy their own place and looked forward to leveraging his past Navy service with a Veterans Affairs loan. But their search stretched on for months, despite the loan guarantee. While their price ranges and target areas varied, these Bay Area families confronted the same reality once they started house hunting. They were consistently outbid, often by investors who paid all cash. Sometimes, even if they had the highest bid – especially in the case of the Mariona family and their VA loan – they were still rejected in favor of an all-cash offer.

“We’re people who want to commit to a place where we can live and grow together, but it hasn’t been possible,” said Mack, who teaches mechanical engineering at UC Berkeley. “We’re two mid-30s professionals who want to spend over half a million dollars on a home, but we can’t find anything, which is ridiculous. We’ve probably made 10 offers. At this point, with many homes, we’re not making offers anymore because we know we’ll be slaughtered.”

Eager to get their piece of the American dream while interest rates are low, many first-time home buyers instead are finding that they’re priced out of a rapidly rising market where they must compete with deep-pocketed investors.

Absentee home buyers now account for about 27 percent of Bay Area home sales, according to real estate research firm DataQuick. All-cash buyers (who overlap with absentee buyers) represent almost a third of sales. Historically, cash buyers were about 13 percent of sales.

First-time home buyers bought 36 percent of California homes sold in 2012, according to the California Association of Realtors. In 2009 and 2010 they represented 47 percent and 44 percent of the market, respectively. Over the past eight years, first-time buyers averaged 39 percent of the market.

Government-backed Federal Housing Administration loans, which are popular with first-time buyers because they allow for smaller down payments, accounted for 12.3 percent of Bay Area home purchases in March, according to research firm DataQuick. That was down from 20.9 percent in March 2012.

“In recent months the FHA level (in the Bay Area) has been the lowest since summer 2008, reflecting both tougher qualifying standards and the difficulties first-time buyers have competing with investors and other cash buyers,” DataQuick said in a statement.

Neighborhood impact

The strong investor presence brings up questions about the long-term impact on neighborhoods.

“I think it’s a shame that all these properties are going to investors and not to people who actually want to live there and be part of the community,” said Rachel Beth Egenhoefer, who along with Kyle Jennings set out to find a new home before their baby was born. She’s now 5 months old, and they’re still looking. “It’s easy for sellers to take the cash and run, but what about having people who actually care about the neighborhood and want to be there and invest in it?”

Maria Benjamin, executive director of the Community Housing Development Corp. of North Richmond, had similar thoughts. The preponderance of investor buyers, most of whom rent out homes, “creates a lot of absentee landlords and a high turnover in neighborhoods,” she said. “All that causes neighborhood instability.”

Then there’s the impact on the families that spend months looking for a home to buy while staying put – in sometimes less than ideal conditions.

Many prospective buyers “are being forced to just stay where they are renting and make do,” said Jennifer Ames, an agent with Red Oak Realty. “Most of my buyers are young families who have outgrown their spaces. They’re all just hanging in, trying to do the best they can with their circumstances.”

People seeking starter homes do have some things working in their favor. Besides the historically low interest rates, home prices in many areas are still far from their peaks. The Bay Area March median of $436,000, for instance, is about a third lower than the region’s $665,000 peak in summer 2007, DataQuick said.

Still, that window of affordability seems to be closing. The California Association of Realtors on Friday said the state’s “affordability index” (the percentage of home buyers who could afford to purchase a median-priced existing single family home in the state) dropped to 44 percent in the first quarter, down from 56 percent a year earlier.

“Higher home prices put a dent in California’s housing affordability,” the Realtors association said in a statement.

Location counts

The three couples seeking homes all have solid employment and can afford to spend from about $350,000 to $550,000 – typical prices for starter homes in this region. All are looking in the East Bay, which is more affordable than San Francisco and the Peninsula. Alameda County’s current median is $416,000; Contra Costa County’s is $346,000.

Still, prices continue to rise rapidly in most of the region, making the search more difficult. “The bottom line in the decent neighborhoods keeps getting raised,” said Patrick Leaper, an agent with Red Oak Realty. “Entry-level buyers are looking at prices going up 2 or 3 percent a month sometimes. That’s critical for somebody whose finances are (tight). They end up being priced out of the market or forced to go to areas or neighborhoods that they weren’t interested in before.”

Looking around

Sometimes expanding the geographic search is what it takes to land a house. That was the case for the Marionas, who started off looking around Albany, where Robin Mariona works for the Department of Parks and Recreation.

“For the amount of money we could spend, in Albany or North Berkeley we would have gotten a smaller place than our rental,” said Carlos Mariona, an IT director for a catering company. “We were at the cusp where everyone was moving a little more north as they got priced out – El Cerrito, then San Pablo, Richmond, El Sobrante. It seemed you had more bang for the buck there.”

After more than six months of house hunting and countless rejected offers, they found a house in the Richmond View area near Wildcat Canyon Park listed at $324,000. They offered $350,000, and Leaper, their agent, negotiated with the seller to accommodate their VA loan’s tight requirements of completing all termite work before the sale closed.

“We’re very happy,” Carlos Mariona said.

More-affordable areas

Despite rapidly rising prices, more-affordable pockets remain scattered around the Bay Area. For each county, here’s the town with the lowest median price in the first quarter of this year – and how much it’s changed since the same time last year.

County	City	Median price Q1 2013	YOY change
Alameda	Oakland	$310,000	48%
Contra Costa	Bay Point	$153,000	4%
Marin	Novato	$565,000	39%
Napa	American Canyon	$360,000	19%
San Francisco	Ingleside Heights (S.F.)	$410,250	58%
San Mateo	East Palo Alto	$356,000	27%
Santa Clara	East Valley (San Jose)	$377,500	28%
Solano	Vallejo	$175,500	28%
Sonoma	Forestville	$261,450	-3%

Source: ZipRealty

I read this article at: http://www.sfchronicle.com/realestate/article/1st-time-buyers-losing-to-investors-4512891.php

Got Questions? – The Caton Team is here to help.

Email Sabrina & Susan at: Info@TheCatonTeam.com

Visit our Website at: http://thecatonteam.com/

Visit us on Facebook: http://www.facebook.com/pages/Sabrina-Susan-The-Caton-Team-Realtors/294970377834

Yelp us at: http://www.yelp.com/biz/the-caton-team-realtors-sabrina-caton-and-susan-caton-redwood-city

Or Yelp me: http://www.yelp.com/user_details_thanx?userid=gpbsls-_RLpPiE9bv3Zygw

Instagram: http://instagram.com/sunshinesabby/

Pintrest: https://pinterest.com/SabrinaCaton/

LinkedIn: http://www.linkedin.com/profile/view?id=6588013&trk=tab_pro

Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

Summary: First-time homebuyer loans and programs

1. FHA loan

2. USDA loan

3. VA loan

4. Good Neighbor Next Door

5. Fannie Mae or Freddie Mac

6. Fannie Mae’s HomePath ReadyBuyer Program

7. Energy-efficient mortgage (EEM)

8. FHA Section 203(k)

9. State and local first-time homebuyer programs and grants

First-time homebuyer programs by state:

10. Native American Direct Loan

Learn more:

Share this:

Like this:

Get to know the HEART San Mateo County Loan Program – on Wednesday October 30, 2019 at the San Carlos library.

For more information or to Register – click here.

Share this:

Like this:

Share this:

Like this: