Recycling Buyers and Creating New First-Time Buyers

There is a bit of critical information floating around that a lot of folks do not seem to know about.  I would like to let you in on this tidbit.  Did you know that even though at some point in you r life you owned a home you can still be considered a “First-Time Buyer”?  That’s right…if you have not owned a home for that past three years you have been recycled and placed back into the sea of what real estate agents, mortgage lenders, escrow officers, etc, consider a first time home buyer.

This is very good news for you if you are interested in getting free money or money at very low rates to help with your down payment.

What is a first-time buyer? 

1.       The obvious is someone that has never owned property of any kind – ever!

2.       The not-so-obvious is the person that has not owned property for the past three years.  As of today that would have been since September 2008. 

A lot of folks began losing their homes in 2008 and if you were one of those unfortunate souls and you had to short sale your house in 2008 – you have been recycled and may now be considered a first time buyer and may also qualify for some of the “Down-Payment Assistance” programs offered by your community.  Almost every county in the United States has a Down Payment Assistance program.

You may now be asking yourself “How do I find out about these programs?” and “How do I find out if I qualify for these programs?”  There are a few general rules but the rules do vary greatly from one community to the next so it will require some research on your part.  Each community should be able to provide you with a list of mortgage professionals that can help you navigate the paperwork and qualification requirements.  It can be a huge headache but the rewards can be worth the time and effort you put in.  I live in San Diego County, California and in some San Diego communities, first time buyers can get up to $70,000 in down payment assistance.  This can be the difference in even being able to buy a home for a lot of people.  Also – let’s say that you have played with one of the “How much home can I afford?” calculators that are online and based on your household income and expense you can afford a home in the $250,000 range.  If you qualify for any of the down payment assistance program you can pretty much add that amount to the purchase price of the home.  For example, you can afford a $250,000 home and you qualify for a program that will give (loan) you $50,000 – this means that you can now look at homes in the $300,000 range.  Does that make sense?

If you are over the household income limit for these programs, don’t lose heart.  You can still qualify for FHA loans with minimal down payment requirements of 3 ½ % down, and if you are a veteran you may qualify for a VA loan which does not require a down payment.  Please keep in mind there are still escrow and inspection fees, etc, that you will need to pay or your real estate professional may be able to negotiate and get these fees paid for you.

If you have any questions please contact me through my website at www.KathyFortenberry.com.