Are there any programs available for a First Time Homebuyer trying to do an FHA loan?

Asked by Steven Diaz, Phoenix, AZ Wed Jun 22, 2011

Im trying to buy my first home using FHA but im not familiar with what i need DP wise and credit score wise? Does anyone know if there are any programs that help the buyer with closing costs or down payment? Im in Gilbert, AZ

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Jeffrey Masich’s answer
Jeffrey Masi…, Agent, Scottsdale, AZ
Wed Jun 22, 2011
Dear Steven:

Yes, See this link for more information: Often it is less expensive to buy than rent in the current environment.

Most banks and Fannie Mae and Freddie Mac homes are offering to pay towards the buyers closing costs when buying a foreclosure home. The USDA loan is 0% down when buying in a qualifiying rural area like Anthem or Buckeye.

FHA has 3.5% down and Fannie Mae has 3% down.

Let me know if you have any more questions.

Jeff Masich, Realtor
Arizona Homes and Land
HomeSmart Realty
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Jose Dias, Agent, Scottsdale, AZ
Wed Jun 22, 2011
Short answer is yes. See below my comments.

1 - typical FHA financing requires 3.5% down. Sellers are allowed to contribute up to 6% towards buyers' closing costs.

2 - Fannie Mae offers HomePath which requires a minimum of 3% down payment. Other benefits of HomePath are no appraisal required, no mortgage insurance, available for primary residence, vacation homes, and investment homes. Available only for properties owned by Fannie Mae. Usually not a problem because Fannie has a huge inventory of homes in our area.

3 - Freddie Mac has HomeSteps which is not a loan program (although some people gets confused). HomeSteps key benefits are up to 3.5% of closing costs assistance, 2-year home warranty, and 30% appliance discount.

4 - Many cities have special programs to help first time home buyers or buyers of distressed properties. So depending on where you want to buy, you may have access to one of those programs. For example, Phoenix has a very interesting program for buyers of distressed properties where they offer up to $15k no-interest loan towards down payment and closing costs. Each program will have its specific eligibility requirements. I wrote a blog post about the Phoenix program I mentioned above. You can check it here ->

I hope this helps.

Jose Dias, REALTOR
(623) 418-5700
Realty One Scottsdale
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Carlos Ramir…, Agent, Mesa, AZ
Wed Jun 22, 2011

As you can see from the responses the typical down payament will be 3.5%, and the typical minimum score about 620. And you can get help with closing costs and even down payment assistance. Of course there are many execptions and requirements to meet. To figure out your best option and determine what is available to you, you need to contact a good lender. Without going over all your details it is impossible for us to determine what might be available for you.

Carlos J. Ramírez, PC, ABR, CNE
Associate Broker/Realtor, HomeSmart –
Certified Negotiation Expert (CNE)
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Brenda & Ron…, Agent, Mesa, AZ
Wed Jun 22, 2011

The best thing for you to do is to speak to a good lender and have them review your credit for you so that you know what you can do as far as purchase price and if you have any credit issues that need to be worked on.

FHA is a 3.5% down payment program, but you can receive a gift for the down payment. It is not difficult to get a seller to cover your closing costs. Periodically there are programs available for first time home buyers. Sometimes areas will be targeted as well. There have been special programs for teachers, police, ... there is the neighborhood stabilization program.... So first thing is to get started with a good lender and see what programs you may fit into.

Best of luck and if you need assistance please give us a call!


Ron & Brenda Cunningham

***Recognized in the Phoenix Business Journal as "One of the Top 50 Realtors in the Valley"
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Maria Clark…, Agent, Scottsdale, AZ
Wed Jun 22, 2011
Morning Steven
Brian is correct on what the average lenders require for credit scores and downpayment funds. But there are several ways you can work with a lender for downpayment assistance. You do need to speak with a real estate professional and a lender to find options available. I have worked with several strong lenders supporting 1st time buyers.
Best of Luck in your searches!
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Doug McVinua, Agent, Gilbert, AZ
Wed Jun 22, 2011

Great decision to purchase a home! FHA is one of the most popular programs being used today for first time home buyers. Most buyers need to have a 620 credit score, although some lenders can work with 580 today. Below 580 it will be difficult.

The FHA down payment is most often 3.5% of the purchase price, this can be a gift to you. Closing costs are another factor that we can deal with by getting a credit from the seller. We could find a few ways to cover this one as well.

Fannie Mae and Freddie Mac each have programs to help home buyers with financing that we could also target for you.

We also have a few non profits with programs to gift money to you as well.

Lots of programs, rates are really low again. Most buyers are lowering payments by buying, what a great time.

Arizona Homes for Sale by a Guy from Iowa
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, ,
Wed Jun 22, 2011
Steven -

There are minimum credit scores that FHA has established and minimum credit scores that individual lenders have established that may be higher than FHA's minimums. FHA has a 530 minimum score and many lenders have 620-640 minimums. For scores below 620 you're likely to have higher interest rates. Your down payment minimum with FHA is 3.5%, but could be higher with lower scores. Most sellers (banks included) will make contributions to your closing costs so that you can often close with just the 3.5% down payment. Having a good agent and mortgage broker are keys to making that happen. Let me know if I can help any further.
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