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    Synnen's Avatar
    Synnen Posts: 7,927, Reputation: 2443
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    #1

    Mar 23, 2009, 01:29 PM
    First time home buyer
    I did a quick browse here, and one on Google, but I was wondering if anyone knows where I can find out whether the area I am looking at buying a house in has any incentives besides the $8k tax credit.

    I know a couple years ago, people were talking about how some places were giving a free down payment paid by the county, and I've heard other tales of how "they" (and it's NOT a reference to the seller) would pay closing costs.

    When I ask people where they heard these things, no one can pinpoint it.

    Am I chasing urban legends here? I'm not ashamed to get some incentives to buy a house, considering that we CAN do it without because we've been fiscally responsible for the last 10 years.

    Anyone have a CLUE what I might be talking about?
    stevetcg's Avatar
    stevetcg Posts: 3,693, Reputation: 353
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    #2

    Mar 23, 2009, 01:35 PM

    FHA and VA allow for mortgages to be had at a minimal down payment, but I have never heard of anywhere that will allow you to get a free down payment. I would venture to guess that there will be places willing to front you the 1st time home buyers credit cash at a hefty interest rate, but I would avoid those like the plague.

    I would speak to a local mortgage broker about your situation. They should be able to quickly assess your chances and what you might qualify for. It doesn't hurt to ask. I did one morning figuring I would get laughed at. We close on our new home in 2 weeks and a great interest rate and very little cash out of pocket.

    Edited to add: if you are interested in a national broker, send me a PM. I would be happy to set you up with my girl. She has done me right and would love to be able to toss her a referral or two.
    twinkiedooter's Avatar
    twinkiedooter Posts: 12,172, Reputation: 1054
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    #3

    Mar 23, 2009, 01:42 PM

    I don't know how you feel about a manufactured modular home but now would be a good time to buy a display model. If you have your lot picked out and it has city sewer and city water the only thing you would need would be a basement or crawl space under the home. A brand new modular around 1,600 sq ft say a 3 br 2 bath model would run you around $70,000 (for just the home). Now that would be before any lot model discount and any other incentive you could get the dealer to throw in. Financing is easier when you do the lot, basement and home as one loan versus the lot on one loan and the house on another. You being up there in Minnesota there are probably not too many dealers around but if you could travel say an hour's drive to a bigger city, you may just be pleasantly surprised at what kind of a great home you could get for the money. I worked at a modular home dealer and since I was the only person there when the boss was gone, I had to know all the ins and outs of how they are built, etc, and the financing available on them.
    If you would go to a dealer they would be able to hook you up with a lender and get a mortgage on the home like a stick built home. The homes usually come with a 10 year warranty on the structure as well. Lots of floor plans to choose from if you need a larger home also and don't find a model on sale that you like. If you're interested, I can help point you in the right direction. Let me know.
    Synnen's Avatar
    Synnen Posts: 7,927, Reputation: 2443
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    #4

    Mar 23, 2009, 02:42 PM

    We're more interested in older homes, built around the turn of the 20th century (1890 to 1930 or so).

    We qualify for FHA, so that's not an issue. We also have the down payment we'd need for what we can afford under a FHA loan.

    I have a realtor currently, and several companies competing to get us to sign on the dotted line for a mortgage. We're pre-approved for a 5% interest rate as well--though I'm sure that will probably come down a bit.

    Our credit score is really high--we actually qualify for waaaaaaay more in a mortgage than we need. While we don't have closing costs AND the downpayment, it's a buyer's market out there, and getting the seller to cover closing costs right now seems to be standard.

    I was just wondering if there was anything ELSE out there for first time homebuyers' incentives.
    stevetcg's Avatar
    stevetcg Posts: 3,693, Reputation: 353
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    #5

    Mar 23, 2009, 02:57 PM
    Quote Originally Posted by Synnen View Post
    We're more interested in older homes, built around the turn of the 20th century (1890 to 1930 or so).

    We qualify for FHA, so that's not an issue. We also have the down payment we'd need for what we can afford under a FHA loan.

    I have a realtor currently, and several companies competing to get us to sign on the dotted line for a mortgage. We're pre-approved for a 5% interest rate as well--though I'm sure that will probably come down a bit.

    Our credit score is really high--we actually qualify for waaaaaaay more in a mortgage than we need. While we don't have closing costs AND the downpayment, it's a buyer's market out there, and getting the seller to cover closing costs right now seems to be standard.

    I was just wondering if there was anything ELSE out there for first time homebuyers' incentives.

    I don't think there is anything else out there. Sorry.

    And just so you are clear... you are preapproved and rates are at 5%. Your rate when you sign is whatever it is when you lock. If 5% is available when you lock, you get 5%. If for some reason rates go up to 6%, that's what you get. You cannot lock in a rate until you are within 30 days of closing.
    Synnen's Avatar
    Synnen Posts: 7,927, Reputation: 2443
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    #6

    Mar 23, 2009, 04:19 PM
    Quote Originally Posted by stevetcg View Post
    I dont think there is anything else out there. Sorry.

    And just so you are clear... you are preapproved and rates are at 5%. Your rate when you sign is whatever it is when you lock. If 5% is available when you lock, you get 5%. If for some reason rates go up to 6%, thats what you get. You cannot lock in a rate until you are within 30 days of closing.
    Oh yes--I'm aware of that. I'm also aware that the rates may change.

    I've been doing as much research as I can on this.

    We're not just jumping into the homebuying thing--I've been doing research on stuff for a year, watching the housing market, saving a downpayment, reading up what I can on it.

    I just wasn't sure if there was a way to find out, easily, if there were state or county incentives to buy in a specific area as well.
    stevetcg's Avatar
    stevetcg Posts: 3,693, Reputation: 353
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    #7

    Mar 23, 2009, 04:25 PM
    Quote Originally Posted by Synnen View Post
    Oh yes--I'm aware of that. I'm also aware that the rates may change.

    I've been doing as much research as I can on this.

    We're not just jumping into the homebuying thing--I've been doing research on stuff for a year, watching the housing market, saving a downpayment, reading up what I can on it.

    I just wasnt sure if there was a way to find out, easily, if there were state or county incentives to buy in a specific area as well.
    The only person that can realistically tell you that is an expert on your local areas, meaning a local broker. Based on everything I have read (also done a ton of research) unless you live in Wash DC, there isn't much going on right now. The government is pretty focused on people on the other end of the game at the moment.

    FWIW, I would look to buy soon. Every indication I have seen tells us that the market is starting to turn and we might have seen the bottom. I am not an expert though... so don't quote me.
    shakatah's Avatar
    shakatah Posts: 9, Reputation: 1
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    #8

    Mar 27, 2009, 06:50 AM
    Hey,

    I think what you referring to are downpayment assistance programs that were plentiful and doing swift business until sometime last year. Not sure if any are still operating. You can search for downpayment assistance programs/grants and see what you find.
    Xyzpdq0121's Avatar
    Xyzpdq0121 Posts: 85, Reputation: 6
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    #9

    Apr 11, 2009, 10:47 PM

    You are most likely talking about DPA (down payment assistance) programs. Most have become illegal because they were a shelter for mortgage fraud. Congress just handed down the other day that FHA, Fannie and Freddie will no longer accept loans with DPA attached to them.

    As for your closing costs... Depending on your area, you SHOULD expect the seller to pay 3-5% toward closing. Now getting a FHA loan on a turn of the century home might be a little tricky, you just need to make sure it passes FHA if that is the route you are going.

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