Help for Veterans Looking. to Own a Home

Besides home ownership programs available from state agencies, some private nonprofits are working to provide home ownership opportunities for veterans. Among them is Operation Homefront, which has a program called Homes on the Homefront.  Honorably discharged veterans who are not current homeowners, and who have no felony convictions, may be eligible for a donated home.  For more information, call 210-659-7756.

For wounded veterans, or the Gold Star spouse, Military Warriors have a program, Homes 4Wounded Heroes, which matches donated homes to wounded veterans who need a home and do not currently carry a mortgage.  Besides matching them with donated, mortgage-free homes, they also provide up to 3 years of financial counseling.

Purple Heart Homes Service connects disabled veterans to donated homes, or, in the event that a disabled veteran is living in a home that needs to be modified for the veteran's disability, helps provide those modifications. For new home owners, the veteran assumes 50% of the home's mortgage.

Homestrong USA has many housing programs, but one in particular for veterans, the Homestrong for Heroes.  This is not a gift of a donated home, but counseling and downpayment or closing cost assistance and financial counseling.  For more information, call 877-647-8764.



 

If You Are Already a Homeowner in Ohio, a New Program

You've heard about first time homebuyer programs. These programs are as thick as fleas and can be found at every state housing agency, and are aimed at buyers who have not owned a home in the last three years.  But Ohio has a program to help current homeowners--or those who have owned a home in the last three years--buy yet another home. 

Next Home is the program for people contemplating that next home in Ohio.  You must have decent credit (at least 640), and there are some income limits. The assistance comes in the form of down payment assistance (2 1/2%) that is forgiven 20% per year that you live in the house, till it all goes away in 5 years.  Check it out of you seek assistance, but are already wan Ohio homeowner.

Freddie Mac's Program for Home Buyers

We have written about Fannie Mae's program of setting aside foreclosed homes for individuals who want to buy homes for a short while, away from the purchasing power of investors via Homepath.  Its sister organization Freddie Mac has a similar program called Homesteps.

Like Homepath, you can search for Freddie Mac-owned homes by location and features, such as numbers of bedrooms and baths.  Homes are kept away from purchase by investors for 20 days (30 in Nevada) so that people buying their own residence can have first crack at them.  Besides that, Freddie offers some finance options, such as only 5% downpayment and no requirement of mortgage insurance in several states, and spreading to more in the near future.  However, you don't need to buy a Freddie Mac house through their financing--you can use any other financing you wish.  Here's a list of states currently offering the Freddie Mac financing and a list of lenders. 


However, if you are a first-time home buyer, you might want to check with your state housing agency to find a first-time home buyer program that could be even better.

There are some other benefits thrown in, including a cash incentive for condos and home warrenties.

For more information, call the Freddie Mac hotline at  800-972-7555.

Source for Finding Downpayment Assistance in Home Buying

Ever on the alert to new websites that can help you find homebuying assistance, I ran across this one created by Workforce Resource, an Atlanta-based software company, Down Payment Resource.  For the homebuying public, it has a searchable database in which you can put in an address, city or county, and then answer several questions that help determine your eligibility for programs in the area: are you a current homeowner, veteran, and so on.  From this, it whips up a list of POSSIBLE downpayment assistance sources.  I say possible since programs change constantly--or become discontinued, or suspended.  The creators of the database are honest enough not to make a lot of dumb promises. 

As a side note, I tried it using only a zip code, and got nothing.  When I sent an email complaining, the creators were prompt and polite, pointing out that zip codes were not workable (since programs were not based on them), and giving me a list of likely prospects.  Try the site and see if you can find some downpayment assistance.

Find House-Buying Money in Toledo and Northwest Ohio

If there's anything a blog entitles you to do, it's shamelessly self-plug.  Not enough to annoy people who read the blog more than once, just a little.  And if the subject matter is a perfect match to the blog, than it's more than excusable.  If you live in northwest Ohio, and are looking to buy a home, you could do worse than come to the Main branch of the Toledo-Lucas County Public Library on April 23 from 6 to 8 p.m.  It's Great Homebuying Opportunities.

You can hear speakers, pick up materials, and talk to people from organizations that can fill you in on great state and local programs that can help you buy a house.  A rep from the Ohio Housing Finance Agency will be there to discuss their first-time homebuyer program, the Ohio Heroes Program, where qualified active service, veterans, firefighters, police, health care workers and others can get help in buying a home, and the mortgage certificate program. We'll have people from the Northwest Ohio Development Agency to discuss their homebuying programs, Neighborhood Housing Services home ownership programs, United North, Habitat for Humanity, and more.  And refreshments.  Did I say that?  Yes, you can munch and sip while discussing your homebuying options. 

If you aren't from northwest Ohio, and are looking for great opportunities yourself, here's some ways to investigate your mortgage-trimming, tax-saving home buying opportunities in your own backyard.

Find a Foreclosed Property From One of the Bigger Holders (Fannie Mae)

The foreclosure crisis has sparked an interest in finding foreclosed properties, either as an investment or a personal residence. One of the bigger holders of such properties is Fannie Mae, the quasi-federal agency that originated many home loans.  They own thousands of properties, and have created some ways of listing and financing them that they hope will make it easier for buyers to take them off their hands.  While foreclosed homes are subject to the same (ridiculous) urban legends about pennies-on-the-dollar buys, there may be one worth your while.

Their website for houses, as well as financing, is Homepath.  You can search for homes by city, state, or zipcode, by price range, and features like beds and baths.  You are shown homes that fit your criteria, with more features, and links to Neighborhood Navigator with information on schools and economic features of the surrounding neighbhorhood. 

There is also a tab on financing through Homepath.  You don't have to finance through them, but there are some interesting features: if you have a credit score of at least 660, you may put down as little as 3% downpayment, and the down payment could come from a gift, grant, or loan from a nonprofit (for some ideas on where to get this, see this link).  The seller may be able to contribute more to the closing costs, and mortgage insurance may not be required.  Also, some homes are eligible for a Homepath Renovation Loan, which allows you to loan not only the purchase price, but money towards the rennovation of the house, if necessary.  Also, under the First Look Program, personal residential buyers get the first shot at homes for 15 days (30 in Nevada), after which investors get a crack at a home. 

Of course, nothing in here is an "automatic bargain," but it offers you more options.  The houses are pretty much sold "as is," so an inspection by a professional that you hire is strongly recommended.  If you need help sorting out your options, you could contact a HUD certified housing counselor to show you your best bets.  More on this via HSH.

Housing Grants and Incentives in Detroit

See this newest one, only through October 31, 2013.

My hometown, Detroit, has had a hard-knock time in the last 50 or so years, with falling population, mismanagement, and industrial exodus.  But public and private resources are trying to change that.  On one hand, efforts are being made to get people to stay put: Citizen's Bank just announced a program of grants totaling $1.6 million to homeowners in five Detroit neighborhoods:
east English Village, Boston Edison north end/Virginia Park, north Rosedale Park, Hubbard Farms.
The money can be used for exterior improvements.  Another, available for homeowners in targeted neighborhoods throughout the city, deals with health and safety hazards, particularly lead abatement.  It is a grant or forgivable loan of up to $15,000; $24,950 if lead abatement is involved.  It can include problems such as furnaces, roofs, plumbing, and electrical problems.  See the city's website, or call 313-224-3461.
Clearcorp also offers grants for lead abatement for Detroit homeowners: grants of up to $8000 for owner occupied houses, $4000 for rental properties, assessments of lead damages, and other services.  Call 313 924 4000 for more information.

Other first time homeowner help is from the state of Michigan.  The Michigan State Housing Development Authority targets homebuying in  the following areas of Wayne County: Detroit, Ecorse, Hamtramck, Highland Park and River Rouge.  That means there is a generous limit on the amount that you can earn and still get first homebuyers assistance.  A two person household can have income up to $77,000 a year and still be eligible for downpayment assistance.  Here's the page on the state's homeownership assistance programs.

Another place to check is the Detroit Housing Commission, which has a homeownership program, requiring a year's employment (unless elderly or disabled), income within requirements, and $1,000 of savings.  

 
Other efforts are aimed at getting people to move back.  One is Project 14 (the name derives for police code for "situation normal."), which attempts to get police to move back to the city.  It tries to kill two birds with one stone: abandonment of neighborhoods by the professional classes and police, and vacant homes. Homes are bought, police can choose from the homes, (if they meet income requirements), a contractor is hired and repairs and upgrades are made.  It's along the lines of other programs created federally and in many localities to attract professionals to underserved areas.  Call 313-974 6869 for more information. 

Some of the companies that have made a commitment to staying in downtown Detroit (Blue Cross/Blue Shield of Michigan, Compuware, DTE, Quicken Loans and Strategic Staffing Solutions) have incentives for their employees to rent or own homes in Detroit as well.  If you buy or rent within the downtown or near-downtown area, you can get a $20,000 forgivable loan towards a home purchase, a $2500 reimbursement for the cost of rental for the first year, and $1000 for the second, and matching funds of up to $5000 for home renovations of $10,000 or more.

See Live Midtown for incentives in the mid-town Detroit area.

How to Find a Neighborhood Stabilization Program That Can Help You Buy A New Home

When I went through my mail yesterday, I opened a flyer from the city of Toledo that announced our city's Neighborhood Stabilization Program (NSP).  This is an initiative funded by the federal Department of Housing and Urban Development (HUD), that is aimed at holding together neighborhoods across the country that have been hit hard by the foreclosure crisis.  Abandoned houses are threatening the stability of these neighborhoods and threatening them with blight.  In the case of Toledo, they have singled out some neighborhoods--Highland Heights, Secor Gardens and Library Village--to offer a homeownership program that is not limited to first-time buyers.  It is limited by income--nobody can make more than 120% of the median income for the area (this is up to $73,800 for a family of four), and includes the usual homebuyer counseling component.  You have to qualify for a fixed rate mortgage from an approved lender.  But the best part is, you can receive a grant of up to 20% of the purchase price to help with downpayment and closing costs.  To find out more, call the Department of Neighborhoods at 419 245-1400 or see this website.

Better yet, you can find other programs like it in your hometown.  Nosing around the internet some more, I found a HUD website that tells more about the NSP. Funds for it have been distributed around the country, and while it has some general guidelines--for instance, 25% of the money must help people making 50% or less of an area's median income, and must go towards stopping the ravages of the foreclosure crisis--each area creates its own program within those guidelines.  Toledo chose to create the program I described above, but every city or county that received the grant money may do it differently.  HUD provides another site with which you can identify a city near you that has received the NSF money, along with contact information.  It will not necessarily tell you what you need to do to qualify--for that you need to contact the city officials--but it will tell you who to contact for details that apply in your community.  Like Toledoans, you might get an opportunity to have financial help to buy a house without being a first-time buyer. 

Where Do You Find First Time Home Buyer Programs?

There are lots of programs to help people buy a home, especially if you are what is called a “first time homebuyer.” I say that in quotes, because it doesn’t mean what you think it does. For the purposes of federally funding, a “first time homebuyer” is in fact somebody that hasn’t owned their primary residence in the last three years. That’s right. If you owned a home say, 10 years ago, but sold it and have been renting since? You’re a “first time homebuyer” right now. So where do you find lower mortgage rates and down payment assistance?

Here's a handy website: Down Payment Resource.  Just put in a city or address, and answer a few questions, and you can come up with a list of possible funds.


Another  place to look is your state’s housing authority. Each housing authority might have a different program from each other, but many have the same features: lower mortgage rates and/or a second mortgage to cover down payment assistance (that may be forgiven if you live in the house for a certain amount of time). See your own state for details. Also, check your city’s housing department. Check the community action agency (a nonprofit agency created to help low-income people) in your area. They may have home ownership programs, too. Check to see if the area in which you want to buy a home has a community development corporation(a nonprofit dedicated to developing a particular area or neighborhood) that covers it—they might have a home buying assistance program, too. If you are a low-income person living in a rural area, see the USDA’s home buying programs. You may qualify for one of them.

If you are a cop, fireman, educator, or EMS tech, you may also qualify for the HUD Good Neighbors Next Door program, created to help move such professionals into economically depressed areas. And if you are currently receiving a Section 8 rental voucher, you may qualify to have your housing subsidy cover part of the cost of purchasing a home—IF you live in a housing authority that is running a home ownership program.

Programs for veterans on a federal level are covered at the Veteran's Administration, but state housing authorities may have special state programs, such as the Heroes Program in Ohio.

Most of these programs have income limitations and house price limitations that can vary from state to state, but if you are buying in a depressed area, the limits might be looser. You will probably also need to go through a financial counseling program, but if you’re willing, and really want to buy a home, you should check it out.

Well, Well...A Home Selling Gimme for Grosse Pointe Shores

Lots of government agencies do deals and giveaways to get people to move to their area and promote home ownership in it.  State housing agencies have low interest rates and downpayment assistance programs. HUD has a hero program that gives house buying incentives to cops, teachers, and other hard-working professionals to buy homes in underdeveloped (poorer) neighborhoods.  Some even have programs to encourage their college graduates to stay put and buy a house.

But Grosse Pointe Shores, a well-to-do Detroit suburb on the shores of Lake  St. Clair, has a unique come-on.  Last year, they started a program to offer the use of boat wells at the city marina, rent free for one year, to people who bought a home there.  The program has been deemed a success and will continue.  The program has two aims: the encourage home buying there, and to fill up the city marina, whose well rentals have fallen with the great recession. 

One of the cool things about living in the Great Lakes region is that access to water is not a rare, out-of-reach thing. A friend of mine bought a house with a gorgeous view of Maumee Bay in a foreclosure deal, and middle class people in the Toledo neighborhood of Pointe Place enjoy Lake Erie as their personal backyard.  Now an enterprising city has taken advantage of this selling point to hustle homes.  Good for them!

Some Good Extensions into the New Year

Some good things have been extended into 2010. For workers who have lost (or will lose) their jobs between the end of November and the end of February, 2010, the subsidy of COBRA health benefits will be extended. Workers losing their jobs in that time period will still be eligible for a 65% subsidy of their premiums.

The $8,000 tax credit for first time buyers has also been extended to purchases between January 1 and April 30th, 2010. If there is a binding home sales contract signed before April 30th--and the sale is finalized by June 30th--the tax credit still stands. The legislation also offers a chance for repeat home buyers to get a $6,500 tax credit, with the same time restrictions.

Can Recovery Money Help Me?

Where is the economic recovery money going? Much of it is going to education and public works, but some of it may be headed towards you, if you know where to look. In Toledo, some block grants have been turned into programs to buy and develop foreclosed property and fix the exteriors of homes. Also, new money has come to improve the energy efficiency of homes for low and moderate income people.

How can you find that money where you live? Get in touch with your city’s housing or development department and see if they have gotten new housing funds, what programs they may have. Remember, that these funds are a one-shot deal with limited resources, so that once the money runs out, the program is over. Also, not all communities have spent their funds on the same types of programs. Many of the nation’s community action agencies (of which there are over 1000 in the U.S.), have gotten funds for heating and energy efficiency home fixups. Find the one in your area, and see if you qualify. Job retraining money has gone to workforce training centers around the United States. Locate the one near you and see if there are retraining programs you can use. These are the levels of government that actually have and distribute programs and services.

Trying to Plug the Brain Drain

States are trying various ways to hold onto to their educated young people, the ones who may otherwise see no future in their home towns. Ohio is trying with the Grants for Grads program. In it, first time homebuyers who have graduated from a college or university in the last 18 months, and graduates of an Ohio high school who meet the income limits are eligible to have a grant to buy a home in the state. They can qualify for a grant of up to 2.5% of their home's purchase price, which will not have to be paid back if they live in Ohio for the next 5 years. For more information, see the website or call 888-362-6432.

The Louisiana has an interesting twist to their Grants for Grads program: native Louisianans who get a degree, either in or outside the state, or those outside the state whose parents are from Louisiana and reside in the state at the time of their graduation, must register within 60 days of graduation to be eligible. No earlier than 2013, a drawing of those registered graduates will be held, and 100 of them will receive the grant to purchase their primary residence. They will be well-rewarded for sticking to the state: their grant will be the total of the last 5 years of their state income tax or $10,000, whichever is the less (for single taxpayers), and, for married taxpayers, either the total of both their last 5 year's state income tax or $15,000, whichever is the less.

Ohio's Got Mortgage Credit Certs Again!

It was a thing too good to stop--the mortgage credit certificates for home buyers. And, after a lapse of a year or two, Ohio has them back. As I wrote in a previous post, MCCs are a good way to get a bigger tax break after purchasing a home, since they allow you to write off a portion of your mortgage interest payments as a credit, rather than a simple deduction.

In the new Ohio program, you can apply for an MCC at the time of the home purchase (not after), if you meet income requirements, and are either 1) a first time buyer (no home ownership in the last 3 years), or 2) an honorably charged veteran or 3) are buying a home in a target area. Check the Ohio Home Finance Administration for more details.

Could You Be a Hero? (For Home-Buying Purposes)

Besides rebuilding neighborhoods with new homeowners, some home buying programs aim to help particular groups of people move into target neighborhoods—communities that are having hard times, but that community leaders would like to see rebuilt. Who would they like to fill the neighborhoods with? Teachers, paramedics, cops, and other helping professionals, that’s who. Some areas in need of educators and other service professionals like the police or EMS technicians simply want to add affordable housing to the attractions they can offer.

A federal program, the Good Neighbors Next Door program at HUD was created to encourage police officer, firefighter, EMS and teacher home ownership in targeted areas. If people in these professions buy a HUD home in a targeted “revitalization area,” they can get a 50% discount off the price of the house. If you qualify as a member of one of these professions, and the house you choose is in a revitalization area, you commit to living in the house as your sole home for the next 36 months.

Ohio now offers a first-time home ownership program for firefighters, police officers, veterans, healthcare workers, paramedics, EMTs, teachers, and active military. It is the Hero's Program. Rates are one quarter percent lower than they are for Ohio's other first time home buyer program. This is a much more inclusive program—the homes are not only homes sold by a particular agency, and are not restricted to revitalization areas. For more information, see the website or call 1-888-362-6432.

Mississippi is responding to a shortage of teachers in rural areas by creating a Housing Assistance for Teachers program. Teachers who agree to teach in target areas of rural Mississippi can get downpayment assistance in purchasing a home.

Check your own state’s housing finance authority to find out if you are a “house buying hero” in the state where you live, or one you intend to move to.

What’s a Mortgage Credit Certificate? How can it help me save a load AFTER I buy my new house?

It’s a form of aid for low and moderate income home owners. Simply put, it allows lower-income home buyers to get a bigger tax break on their yearly income taxes than are generally available. Usually, when a homeowner files their federal income tax each year, they are allowed to deduct the cost of their interest payments on their home from their taxable income up to $1 million. In the case of home owners who get an MCC at the time of their home purchases, however, they are allowed to take a portion of that as a tax credit, rather than a deduction. This is a much bigger savings, because a tax credit is taken off the amount of tax owned, rather than just taxable income. For instance, a homeowner who has paid $10,000 in interest is allowed to deduct the $10,000 from the amount of income that can be taxed. However, if the homeowner has a mortgage credit certificate good for 25%, for instance, he can take 25% of that $10,000 right off the final tax bill. Quite a savings! The credit is good for the life of the mortgage, but if you sell the house in less than nine years, you may have to pay back some of the tax break you received. It’s only good if it is still your primary residence—not if you move out. For more information, see the IRS publication 530, Tax Information for First Time Home Buyers.

Who is eligible?

First-time homebuyers (people who have not owned their primary residences in the last three years), who have incomes that fall under the range set by the MCC coordinator’s limits. If the home is in a “target area” that the state or local government is trying to develop economically, the limits might be removed. MCCs are only available if you buy a home in an area where the state or local government offers the MCC program. Bodies that coordinate mortgage credit certificates include state housing agencies--here's a list of state agency websites, so that you can see if yours offers a MCC), and local and county housing departments. Contact the state, county and city housing departments and agencies in your area to see if they offer this product. Agencies vary in the percent of the mortgage that can be taken as a credit. But you must apply for this at the time of purchase. It’s not available for everyone, but is well worth looking into.

Get Help Buying Your First House!

There are lots of come-ons for "free money for first time homeowners." But unlike a lot of other "free money" nonsense, it's true. If you are a first-time homeowner (and that's defined as someone who has not owned their primary residence in the last 3 years), there are some great deals for you. That's right--even if you owned a house 10 years ago, but got divorced, ended up a renter, and have been renting ever since, you fit the government's definition of a first time owner. There's a couple types of help for you, from a variety of sources.

For one thing, many state and local housing agencies offer mortgages at reduced rates for first-time buyers. They may also offer downpayment assistance in the form of a grant, or, more commonly, a second mortgage which may be zero percent, and forgiven over a shorter period. As an example, the downpayment may be up to 3% of the price of the house. It could be given to you in the form of a second mortgage, which will be forgiven over a period of seven years. If you sell the house before then, you may have to repay part of that loan, but if you don't, it can be forgiven. Conditions of mortgages and types of aid differ from state to state. There are restrictions on income and home prices that apply. More generous income and price limits may be in effect for homes in "target areas," economically poor and depressed places where the government wants to encourage people to buy homes.

To find your state agency, go to the website of the National Council of State Housing Agencies and search for your state's housing agency and its website. Another possibility is the housing or neighborhoods department in your own city, which you should be able to find in the blue government pages of the phone book. Community action agencies (CAAs), nonprofit groups created to help the poor in their particular area, may offer programs for first time homebuyers, too, and a check of the Community Action Partnership website can help you find one in your area. Community development corporations (nonprofits that are trying to improve a particular area, county or neighborhood) often have programs, too. Use the National Congress for Community Development's website to find the state organization. They can advise you of CDCs in your area. So can your local housing department.

Look at all your options--state and local. Be sure to inquire about whether the programs are accepting applications right now--programs can only exist as long as there are funds. See what is the best bargain in the area that you want to buy. For instance, state programs are good for the whole state, but a local community agency may have boundaries for where a home may be purchased to qualify for their program.

Often, besides income limits, a program may require you to have financial counseling. Welcome it! Any agency wants to see that the program is successful for you and your new neighborhood, and they want to prepare you for the leap into home ownership.

A great IDeA for more money

While there are hardly ever really free money sources, there are ways that low to middle income people can go to save up their money and fulfill a dream.

One of these ways is the Individual Development Account (IDA). It's a savings plan where the person chooses a financial goal, like starting a business, continuing their education, or buying or fixing up their house. Then, they make a plan to regularly save money, and their savings are matched by the sponsoring nonprofit agency until they reach their goal. Along the way, the savers receive counseling about budgeting and financial planning for their new goal. How much the nonprofit organization matches varies from one organization to the next. Sometimes, they will contribute dollar for dollar, or even 2 for 1 or 3 for 1.

Most organizations that offer IDAs are nonprofits that are attempting to help low and middle income people in a particular area, so geographic boundaries, as well as income limits apply. To find an organization that offers IDAs where you live, go to the IDA directory at the Corporation For Enterprise Development. Just put in your state, and leave the other search options blank. It will pull up a list of organizations that provide IDAs. Remember, however, that since these nonprofit organizations depend on grants for their programs, there may not be money available if they have run out themselves. But check it out. It's worth a try.