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First Time Homebuyers
With the exception of some programs
offered by HomeWORD, technically speaking, there are no loan
programs exclusive to first time home buyers in Missoula
County. Missoula is ‘targeted’ county, therefore certain
qualifying limitations have been waived to allow subsequent
buyers to take advantage of programs popular with the
typical first time homebuyer.
Borrowers purchasing their first home
tend to have similar qualifying characteristics so they
gravitate toward the programs that accommodate these
characteristics through more liberal underwriting criteria.
FHA (Federal Housing Administration), a department of HUD,
is a powerful force in this arena by allowing the use of
non-occupying co-borrowers, tolerance of moderate credit
issues, creative sources of funds to close and other less
stringent criteria.
The
Montana Board of Housing (MBOH)
offers reduced interest rates and closing costs as an
adjunct to several different loan programs. MBOH limits the
purchase price of the home that can be acquired with their
programs and places an income ceiling on the applicant.
With Missoula being a ‘targeted’ county, buyers can use MVOH
programs on subsequent home purchases.
Low Down Payment Loans
The advent of the conventional zero
down loan is a relatively recent development. It greatly
expands the number of loan choices available to good credit
but cash strapped borrowers. Historically, the Veteran’s
Administration (VA) loan was the primary tool used to
finance 100% of the home’s purchase price. Now, with good
or even ‘fair’ credit, borrowers can take advantage of a
range of financing options that require little, if any down
payment. Besides
VA,
these loans run the gamut of
Rural Development,
Genworth MBOH,
FHA and
numerous conventional options. Each of these are discussed
under the ‘Loan Programs’ page of our website.
The key component to qualifying for a
low down payment loan (with the exception of FHA) is a
‘better than average credit rating’. Since a low down
payment confers more risk to the lender, underwriting
standards tend to be tighter on these loans relative to
loans with a traditionally higher down payment. Fees, rates
and costs are frequently higher on low or zero down
programs, however, there is such a wide variation of loans
in this category that each program should be examined
individually to determine a fit with borrower’s
qualifications and requirements. |
