You may also want to consider a normal FHA loan and, if approved, participate in the HART program which allows for up to 3% contribution towards your required 3% down payment. Countrywide participates in this program and, if bidding on a Countrywide REO, they waive the appraisal fee and will also, in many cases, contribute up to 3% of your closing costs. This program applies just about anywhere and is not tied to other FHA programs that make it sometimes difficult to apply to REO homes. Bank owned homes in the area can be a fantastic bargain if you are patient and have a bit of luck. (Luck is when preparation meets opportunity)

I am a single teacher (no children) in California. The teacher incentive HUD homes available are incredibly far from where I teach and many are the same price as what is available on the market. Also you have to bid for them so any good ones will have alot of competition. Finally, there were about five homes available when I checked last, again really far from my place of work. Most are really old and I can't just move out there because I am under contract. My lender applied for a CALFHA for me, which seems the best. Having children actually helps because they look at your income and number of people in the home to see if you qualify. I almost make too much to qualify. Can you imagine?

I think waiting and saving up for the down payment and closing costs would be best. The seller may pay closing costs. Ask if they will because it is a buyers market. Remember, get your credit as good as possible so you can get the best interest rate. Pay off your cards if you can and don't buy a new car or finance anything big before purchasing.

You're in California, you might qualify for CALHFA or CALSTRS. They have programs with really low interest rates. A lot of lenders and Realtors don't know about these programs so if the one you ask doesn't know, keep looking.

http://www.calhfa.ca.gov/
http://www.calstrs.com/

Maricela,
Prices are falling like a rock and they have a long, long, long way to go...
Check out this article:
http://www.businessweek.com/magazine/content/08_06/b40700407…

Prices will fall to get in line with Home Price vs. Rent and Median Home Price vs. Median income ratios. You will probably kick yourself if you buy a home anytime soon. Renting is your best bet right now, and wait to buy in 2011 or 2012.

If you bought a home for $300,000 and next year, you saw an identical home across the street selling for $240,000, would you kick youself? You are in a prime position to rent a great place and negotiate a great price for that rental. Save your money and buy in a few years.

Good luck,
John

These answers are all good. However, if you check with multiple lending institutions DO NOT let them all check your credit. Perhaps you should pull your own credit reports (all 3) for starters. When asking the lenders questions let them know you are not ready for them to pull your credit but ask them to base their preliminary quote on the scores the report you print out shows

As for moving to another area of the country...ONLY if you want to! Housing may be cheaper but wages most likely will be too. It's all relative.

Marciela,

Dot is correct. There are home loans specifically for teachers. For example, I know Wells Fargo has such a program. You should contact a few mortgage specialists or bank loan officers from different institutions and inquire.

Maricela. Have you considered moving to a less expensive housing market? Like MO, AR, TN? As you're a teacher, the need for teacher is general thru the USA and you could get employment in other states. The other option is to look into the special program created for teachers and policeman who don't mind buying distressed property and fixing it up in 'poor, designated area'. These areas are usually blighted, but you can pick up a home for $1.00 in some cases and obtain low cost financing for updates and repairs.
As a single person this may not appeal to you, especially if safety is an issue. However, I would consult a local lender and see what other programs might be available to persons in your situation. Hope this helps?

There are programs for educators and first time home buyers that you may be able to take advantage of. You should speak to a loan officer that would have the info on what you might qualify for.

How is your credit? Do you have any money saved up for closing costs and other expenses.

Let me know if you would like for me to refer you to a loan officer.