HomeBuying a HomeFirst Time Home Buyer Programs

First Time Home Buyer Programs

Last updated 29th Nov 2022

There are many things we do for the first time... take a step, fall in love. But with today's home prices, it would be nice to make an informed purchase decision that we can look back on with no regrets. That's why first time home buyer programs are such an important source of information for anyone thinking about taking the plunge, and buying a home.

We've already put together a four-part series appropriately named First Time Home Buyer. This series walks the reader through the process of figuring out what they can afford, how to locate a home, and the right way to work with a real estate agent. In this article, we explain the types of programs that are available to first time home buyers; both before and after homeownership.

Local Home Buying Programs

Nearly every state offers help to home buyers at the local level. These programs are usually run out of municipal or county offices, sometimes in conjunction with local banks or lenders. The intention of these programs is to educate the home buyer, and assist them with the process of finding a new home. The HUD website maintains a list of programs offered in each state.

One of HUD's explicitly stated goals is to help renters convert their monthly rental payments to mortgage payments. If that sounds like an interesting program, then take a look at the HUD website for the specific areas of the country where these conversions are taking place.

Good Neighbor Next Door

HUD runs several very important home buyer programs aimed at getting those individuals that are working in a community to live in that same community. This program was originally limited to the Officer Next Door and Teacher Next Door programs.

In 2006, HUD consolidated these programs into the Good Neighbor Next Door program. In addition to a change in the program's name, the numbers of eligible workers were expanded to include: law enforcement / police officers, teachers, firefighters, and emergency medical technicians who comply with the regulations of the program.

Officer Next Door Program

The Officer Next Door Program is an effort to build stronger communities and safer neighborhoods; HUD offers this program to law enforcement officers. Participants need to be a sworn law enforcement officer that is employed full time at the federal, state, county or local level. Officers working for public or private colleges and universities are also eligible.

Participants do not have to be a first time home buyer; however, they cannot own any other home at the time of closing. The properties are single family homes that are located in certain revitalization areas throughout the country. The entire program is run over the Internet.

The big advantage of this program is that participating officers can purchase these homes at a 50% discount from its listing price. In addition, the officer may be eligible for certain FHA-insured mortgages.

Teacher Next Door

The Teacher Next Door Program is also offered by HUD, and works the exact same way as the Officer Next Door Program. In an effort to make communities stronger throughout the country, this program encourages teachers to buy homes in designated revitalization areas.

To be eligible, the teacher must be employed full time by an educational agency serving the school district in which the home is located. Educational agencies include public and private schools at the federal, state, county, or local level. The teacher must be a state certified teacher or administrator for kindergarten through 12th grade.

Home Ownership Vouchers

Many first time home buyers have trouble meeting the financial obligation of their monthly mortgage payments. Fortunately, there is a voucher program that might be able to help anyone that is struggling to meet this obligation. The program is run by local Public Housing Authorities, and the voucher can be applied to the participant's monthly mortgage payments.

Individuals need to apply for a housing choice voucher to participate in the program. To be eligible, they must be a first time home owner or cooperative member. The expenses eligible through this voucher program include mortgage payments, real estate taxes, utilities, and maintenance of the home.

This program uses family income, along with expenses, to calculate how much is received by participants each month. The local PHA will have more complete information on this very important program.

Money Smart Adult Education Programs

The last program worth mentioning is the FDIC's Money Smart program. Recognizing the benefits of financial management skills in America's communities, this program offers a total of ten training modules that range from understanding the banking system through home ownership.

The Money Smart program is meant to be used by banks and other local organizations that are interested in providing financial information back to their communities via educational workshops. The hope is that people will make better decisions on credit, banking, budgeting, and home ownership. For more information on this program, visit the FDIC's website.

About the Author - First Time Home Buyer Programs

Moneyzine Editor

Moneyzine Editor