Affordable Homes and Financing Programs

In my market areas, homes are at the most affordable levels in a very
long time. Call it a market correction, a recession or whatever you
like, but homes are now in the best price ranges that I have seen.
Part of the equation is supply.

When I moved to Livingston County in 1988, the big wave of construction was just beginning. We had a marginally tough time finding a home that fit our needs and our budget. Almost immediately after moving in, I saw corn fields transformed into subdivisions, roads widened, traffic signals installed and more retail being developed. The recent wave of foreclosures has also added a lot of homes to the supply with very attractive pricing.

Today buyers can find something that they like without too much difficulty - from starter homes to condominiums to luxury homes.

If you're a first-time buyer or even a 'move-up' buyer, there are programs that can help you. The FHA loan program is very attractive as long as you have a steady source of income, have an employment history and a good record of paying bills.

A marginal down payment will be needed, but the interest rates on this type of loan are very good right now. While the downpayment assistance programs are gone, you can often get the sellers to pay your closing costs as part of the deal - even banks selling foreclosures are
agreeing to that. And you don't need a stellar credit rating, either.

Another option is the U.S. Department of Agriculture's Rural Home Development Program. It offers 100 percent financing but has certain income levels which you have to be below in order to qualify. It's for primary residences (occupied by you), and it's for non-urban areas. If you currently live in a central city or suburb, it's possible that your local lenders won't know about this program, although it has widespread exposure in my market areas.

If you can't meet the tighter lending requirements for a fixed rate mortgage, one of these two programs may be your avenue to home ownership. It's often difficult to figure out which is best for you, so finding a great lender with experience in both of these loan types can make the difference.

A quick internet search found this local lender who has one of the best explanations of the benefits of these type of loans. Check out http://www.44mortgage.com for an excellent primer on these loan types.