Given the recent upheaval in the financial system many Huntsville First Time Home Buyers may feel they have been shut out of the market and depending on your credit rating this may very well be the case. This is why in today’s Real Estate Market the first step of any potential home buyer is to get pre-qualified for a mortgage.
The first of the year is a very good time to begin this process because assistance programs have been funded and the winter months are generally the slow home selling season with inventory and prices often at their best levels of the year. So don’t count yourself out of the current market until you’ve done your homework and moreover we would be glad to assist you in the Mortgage Pre-Qualification endeavor just drop us an email and we’ll get things rolling.
By far the largest obstacle for Huntsville First Time Home Buyers is the required down payment but there are options:
The Alabama Housing Finance Authority’s (AHFA) First Step program is one option designed especially for low and moderate income home buyers.
- First time home buyer is defined as not owning a home for the last 3 years
- 100% down payment financing is offered at lower than market rates
- The 1st and 2nd mortgages are blended so there is only a single monthly payment
- Income and purchase price restrictions do apply
The Federal Housing Authority (FHA) is another option:
- As of January 1, 2009 the buyer is required to provide a minimum of 3.5% down
- The down payment may be gifted from friends, family, and charitable organizations
- The seller may not provided any gifted funds for down payment purposes
- The down payment may not be borrowed
- The seller can provide assistance with closing costs and fees
While FHA requirements have stiffened for 2009 there is also a new First Time Home Buyer Tax Credit available that should not be overlooked:
- Tax credit of 10% of the purchase price up to $7,500
- The purchase must close on or before July 1, 2009
- The tax credit is an interest free loan that must be paid back over 15 years
- Re-payments begin with your 2010 tax return
- The money can be used for any purpose: pay down debt, fix up your home, etc.
- Income restrictions do apply $75-$95k for singles $150k-$170k for joint filers
- The funds can not come from tax exempt bonds such as the AHFA program
Huntsville Homes – For First Time Buyers
Update Note: The recent economic recovery act modified and improved on the Federal Tax Cut for first-time home buyers please see our Home Buyer’s Tax Credit – Now Bigger and Better post for the details.
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it’s more of a question than a comment, I couldn’t find an answer to, although my logic/the wording (home buyer vs. home owner) tells me I would qualify for the tax credit:
I currently own a house (jointly with hubby on the deed), but the mortgage is in his name (although money comes out of my pocket too/family’s). So that makes him the homebuyer.
Now, we plan on moving out, and if my logic is correct I could take the mortgage in my name (making me first time home buyer) and thus qualify for the FHA tax credit, and put him on the deed as homeowner.
Does it work like this?
Thank you
Hi Mary,
Thanks for the comment.
The way I read the requirement was that you could not have ‘owned’ a home in the last three years.
Even though your liability may be limited for your current mortgage since you are not a co-borrower or co-signer, the fact that your name is on the property deed indicates that you may very well be a co-owner. So my first thought is that you would likely not qualify for the tax credit.
Of course you should always check with a tax professional before making any financial decision that may effect your income taxes.
Happy Home Hunting,
Elizabeth
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