3 First Time Home Buyer Programs for Your Low Credit Scores in Houston

Irrespective of what your friends say, purchasing a home for the first time is not easy. Now, you can be called a first-time homebuyer for the second time. How? A person can also qualify for a beginner’s program if he/she has not bought a home in the last 3 years. There are various requirements to pass as a first-time borrower, but look at the options you have now. The first time is always difficult because potential obstacles need to be sorted.

From credit issues to not saving enough for a down payment, the challenges are prevalent everywhere. Some of the first time home buyer programs with low credit scores in Houston, TX address the problem of large down payment. So, the programs help you push through the roadblocks, and you can reach your final goal with ease. The programs make the buying process affordable; hence, there is no scope for losing hope. Here are a few of the programs that prove to be helpful for first-time home buyers.

FHA and VA Loans for Bad Credit

These two government-sponsored loans exist to help you with low credit issues. Most of the borrowers with poor FICO scores are unable to pay for down payment straight away. The FHA loan requires 580 scores, and the VA loan demands 550 scores. But you should know the latter is only available for the eligible veterans and military personnel. Currently, VA loan is the best mortgage option in the market because it does not ask you to put down anything. Additionally, the FHA loan asks for a 3.5% down payment. Needless to say, these two loans are designed for borrowers with low credit scores in Houston.

3% Down Payment Program

If you are not independently wealthy, putting down a large percentage of the loan amount can be difficult. You can choose a 3% down payment program, which helps borrowers with turbulent financial conditions. There is no monthly mortgage insurance, unlike traditional or FHA loans. The loan rates are low, and it is a beneficial choice for anyone facing problems in finding adequate money for a down payment. But there is a little catch – the mortgage requires at least 620. So, if you have a brilliant credit score but are running low on cash reserve, this is a perfect choice.

Fannie Mae or Freddie Mac Mortgage

Did you know a conventional loan can be insured? Private mortgage insurance protects the mortgage lender from the risk of future financial loss. It is the ideal loan program for a buyer who has worked on the mortgage application for a long time. As long as you have 620 credit, you are good to go. If you do not wish to pay for monthly mortgage insurance, put down 20%. Financing is available up to 95% LTV, and you can apply for gift funds. 

If you are in trouble for the down payment, you can seek the help of a down payment assistance program in the form of a forgivable loan. So, ask your lender whether he can guide you in this situation.