Financing in Phoenixville>Question Details

Kimandjd121, Home Buyer in Phoenixville, PA

We are a first time home buyer and have a credit score of 630. We are using the $8000 tax credit as down

Asked by Kimandjd121, Phoenixville, PA Mon Aug 17, 2009

money but are wondering which is a better loan type for us. A USDA, PHFA, or an FHA. And what the difference between the 3 really is?

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Hi Kimandjd121

With a credit score of 630 you can qualify for a mortgage. However a 630 credit score is a very low credit score. Did you know that a 720 credit score can lower the interest rate which would mean for the same monthly payment you can purchase a nicer home in a nicer area and pay less money?

Any good honest realtor should be helping you improve your credit profile so that you can borrow money better. They benefit too because they can sell you a larger home. :)

Down the road you may want to finance a car and you will need a credit score of 680 in order to qualify for that as well. Did you know that utilities cost more for consumers with lowe credit scores.

You pay for credit repair once and that fee is $399.00. with a money back policy. You pay for poor credit for a long long time. Good luck!
0 votes Thank Flag Link Fri Aug 21, 2009
I also would be interested in learning how you are using the Tax Credit for the Down Payment Kimandjd121?

Here is a link to the Gov site that has info on all current Fed Gov. housing loans....…

You can get specific information, compare options, or take a short questionnaire to determine your eligibility for each program.

@Deborah...USDA....Think Rural housing loan/grant programs. Check out the site above.

0 votes Thank Flag Link Tue Aug 18, 2009
Hello Homebuyer,

USDA is the United States Department of Agriculture and I do not know of a loan program being offered by them.
PHFA is the Pennsylvania Housing and Finance Agency and they offer the State bond to assist with down payment and or closing costs, usually up to $3,000 and there are income restrictions.
FHA is the Federal Housing Administration and they provide mortgage insurance on loans offered by
FHA approved lenders. And it is also the largest mortgage insurer in the world.
The Tax credit advance loan is offered by PHFA and they are only offering up to $5,000 in advance, to help towards closing costs (there are income restrictions with this product also). I suggest contacting a local bank (Sovereign, Citizens or PNC) to get pre-approved, and write or give me a call for more details.

Deborah Francis
ERA Alliance Real Estate
Office: 215-224-210 ext.119
Cell: 215-626-5027
0 votes Thank Flag Link Tue Aug 18, 2009
You can't use the tax credit as a down payment. That money is given to you after you buy the house, not while you're buying the house. If a lender tells you differently, I'd question their ability to close the loan. IRS regulations states that you receive this money after you close, after you modify your returns for 2008. Remember, too, that you must keep the house for at least 3 years or you may have to pay back a portion of the money. That said, I'm not too familiar with USDA. I've never heard of PHFA. I think you mean PFHA. This is a program for buyers which allows lower rates. It takes about 6 months to close. Similar to NACA which also allows people to buy homes with lower rates and closing costs, there are a lot of extra things you must do to qualify including paying a $50 monthly fee for up to 10 years and not able to refinance unless you are at least 30 days late on the mortgage.
0 votes Thank Flag Link Mon Aug 17, 2009
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