In the absence of federal stimulus money, it is important for residents to take advantage of state-specific assistance programs. Two such programs target first-time home buyers – one from Pennsylvania and the other from New Jersey. These first-time home buyer assistance programs can offer up to $15,000 to eligible residents.
Details of first-time home buyer assistance programs
Pennsylvania offers the Homestead Down Payment Assistance Loan to eligible first-time home buyers. Eligible home buyers get a no-interest loan to make the down payment or pay the closing costs of buying a home.
This program even more beneficial because the loan is forgiven if the house is not sold for five or more years. On the other hand, the recipient will have to repay a portion of the loan if the home is sold before five years.
The maximum loan that a first-time buyer can get under the program is $10,000. Income and other requirements, such as purchase price limits, to qualify for the assistance program vary by county.
Also, home buyers need to meet the minimum down payment requirement depending on the mortgage program they are applying for. Buyers must also meet other property guidelines outlined by the mortgage program.
New Jersey’s Down Payment Assistance Program (DPA) offers up to $15,000 to certain first-time homebuyers to cover down payments or closing costs. A person is considered to be a first-time homebuyer if they haven’t owned a home within the previous three years.
To qualify for the assistance program, a first-time buyer needs to pair it with a 30-year New Jersey Housing and Mortgage Finance Agency (NJHMFA) first mortgage loan.
Similar to Pennsylvania’s Homestead Down Payment Assistance Loan program, the income and other requirements of New Jersey’s program vary depending on the specific municipality. Only the homes that will be used as a primary residence in any New Jersey County qualify for a loan under DPA.
Who is a first-time home buyer?
Federal and state governments offer several special benefits to first-time homebuyers. Even the IRS allows early withdrawals from retirement savings accounts to first-time homebuyers.
A first-time home buyer is generally a person who is buying a principal residence for the first time. However, different states have different rules regarding who is considered to be a first-time buyer.
Moreover, assistance is generally allowed on the homebuyer’s principal residence, or the primary location that the person inhabits. It must be noted that a principal residence may not always be a conventional house. For instance, a boat could be a principal residence if someone resides in it full-time.
According to the U.S. Department of Housing and Urban Development (HUD), a first-time buyer is a person who hasn’t owned a principal residence for a three-year period; or a person who has never owned a principal residence even if the person’s spouse was a homeowner; or a single parent who earlier owned a home with an ex-spouse; or a displaced homemaker who only owned a home with a spouse; or a person whose property is not in compliance with local or state building codes.
