Which one of these FHA, Vendee, USDA would be best for 1st time homebuyer with less than 5000 saved?

Asked by Bettyboo, Wylie, TX Sun Jun 7, 2009

I am a teacher and my credit score is between 680-700

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Stacey Wyatt’s answer
Stacey Wyatt, Agent, Roswell, GA
Sun Jun 7, 2009

I would need to know a little bit more about your situation to completely answer this, but let's give it a shot anyway.

USDA - Your household income must meet certain guidelines and this type of loan may only be used for homes in eligble rural areas. You can enter you City, State and Zip Code at this website, http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do… to determine if you are eligible.

Vendee - Vendee loan financing is available on VA-Owned Homes. Unlike VA Loans, you do not need to be a Veteran to obtain Vendee financing. Vendee loans have extremely low fees as well as low, or even no, downpayment requirements which is very attractive. The only challenge here is that you can only by a VA Home, which are much fewer in number than a traditionally financed home. You would need to meet with a Real Estate Agent familiar with VA Homes to gain entrance into these type of homes.

FHA - This seems like the best choice given what we know about your situation. FHA sets a limit on the purchase price of a home, based on your state and city... this gives you a much wider variety of homes to choose from then the USDA and Vendee homes... FHA only requires 3.5% down... so if you were buying a $100,000 home you would only need $3,500 for the downpayment (Guess I didn't need to explain that to a teacher;). In Georgia, it is pretty common to get the Seller to pay for your Closing Costs, but you would need to confirm if that is standard in your area.

Couple other things at play: 1) You must take advantage of the $8,000 First Time Home Buyer Tax Credit before 12/1/09. You need to allow at least 45 - 60 days to close once you have an accepted contract on your home. So that gives you a timetable. 2) In Georgia, the State also provides an additional $1,800 Tax Credit... not sure about Texas, but it is worth researching. 3) Rates are still low, but I would act sooner than later... they have climbed the last couple weeks. I would get pre-approved by a Lender and lock into a rate while you look.

What an amazing time to buy!!! Good luck and best wishes.
1 vote
T.E. & Naima…, Agent, Dallas, TX
Fri Jun 12, 2009

Houses in Wylie are likely within the geographic area that USDA will guarantee. Their program will allow you to borrow 100% of the value plus the 2% guarantee fee. This would leave only closing costs for you to pay.
For a someone with little down payment, this is the best program, even better than VA.

Your score is relevant if you do not qualify for the direct-lending program from USDA, not because USDA requires you to have a good score, but because lenders do. Anything above 620 is currently acceptable.

If you need help checking that a property address is within the geographic limits USDA will guarantee, contact me through my profile and I will show you how to do that, or you can give me the address and I will advise you.
Web Reference:  http://www.Mortgages-TX.com
0 votes
Bettyboo, Home Buyer, Wylie, TX
Wed Jun 10, 2009
My many thanks to everyone that responded to my question. You provided me with valuable information.
0 votes
Sally W. Ham…, , Atlanta, GA
Sun Jun 7, 2009
Your score is not the driving force here. Your score is acceptable for all of these loans. It is the cash to close. FHA is 3.5% down. What do you qualify for? Have you been pre qualified by a lender. That is where you should start.

Sally W. Hamby
Pine State Mortgage
Atlanta, Ga
0 votes
Dallas Texas, Agent, Dallas, TN
Sun Jun 7, 2009
Odds are you would fit within normal "main stream population " as a home buyer FHA loan requires 3.5% as a downpayment It all depends on what you can qualify for regards sales purchase.

You need money for inspection, appraisal, earnest money.

Where did the credit score come from? Mortgage broker ? If yes have your loan officer detail all for you. If your credit score from online resource much that information is not accurate.

I am a Dallas realtor and loan officer “one stop for all your real estate services”

Lynn A. Crosby ~ National Featured Realtor
"...Specializing in Residential, Commercial Properties and Loans..."
Dallas Realtor, and Credit Repair Consultant -
The Michael Group - "Dallas Business Journal 07’ & 08' list top realtors"
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0 votes
Dana Schuster, Agent, Slidell, LA
Sun Jun 7, 2009
Thumbs up from me. Stacey.Great,straighforward helpful answer without the usual spam.
0 votes
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