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5 Under-Utilized Programs for First-Time Home Buyers in Detroit

Buying a home in Detroit is an exciting milestone in any person’s life. That said, it can also be overwhelming and intimidating, especially for first-time home buyers. There are many factors to consider, such as location, size, and price. There are also costs, red tape, and timeframes that some buyers may not be familiar with. Fortunately, there are numerous programs that can help make the process easier and more affordable for first-time home buyers in Detroit. In this blog post, we will discuss five under-utilized programs that can help first-time home buyers achieve their dream of owning a home.

1. FHA Loans

FHA loans are a popular option for first-time home buyers because they are insured by the Federal Housing Administration (FHA), allowing lenders to offer more lenient qualification requirements. These loans have lower down payment requirements, often as low as 3.5%, and more flexible credit score requirements. Additionally, the FHA allows the seller to pay up to 6% of the closing costs, which can help reduce out-of-pocket expenses for the buyer. These loans can save borrowers a tremendous amount of money as compared to traditional loans which will often require a 20% down payment.  That said, it can require larger interest payments over time as you will be financing a larger amount of money. FHA loans also require mortgage insurance in an effort to protect the lender. 

2. USDA Loans

USDA loans are a type of loan offered by the United States Department of Agriculture that are designed to help low- to moderate-income families in rural areas purchase homes. One of the most attractive features of USDA loans is that they offer 100% financing, meaning that no down payment is required. Additionally, these loans typically have lower interest rates than conventional loans. To qualify for a USDA loan, the property being purchased must be located in a designated rural area, and the buyer must meet certain income requirements. Many areas outside of major cities will meet the geographical requirements. 

3. Good Neighbor Next Door Program

The Good Neighbor Next Door Program is a program offered by the U.S. Department of Housing and Urban Development (HUD). This program is designed to help law enforcement officers, firefighters, emergency medical technicians, and teachers purchase homes in revitalization areas. These homes are offered at a 50% discount of the list price, making them an incredibly affordable option for those who qualify. To be eligible, the buyer must agree to live in the home for at least 36 months as their primary residence. If you are a direct responder or teacher here in Detroit, our team would be happy to help you find properties within this program. 

4. Energy Efficient Mortgage (EEM)

An Energy Efficient Mortgage (EEM) is a type of mortgage that allows home buyers to finance energy-efficient upgrades to the home they are purchasing. These upgrades can include anything from new windows and doors to HVAC systems and insulation. The cost of the upgrades is added to the mortgage, allowing home buyers to make these improvements without having to pay out of pocket. This can help buyers save thousands upfront, which is often a welcome relief when buying a home in Detroit. In addition, the energy savings from the upgrades can help offset the cost of the upgrades over time, making this an attractive option for first-time home buyers who are interested in making their home more energy-efficient.

5. HomePath Ready Buyer Program

The HomePath Ready Buyer Program is a program offered by Fannie Mae that is designed to help first-time home buyers purchase a Fannie Mae-owned property. The program offers a 3% down payment requirement, and buyers who complete a homebuyer education course can receive up to 3% in closing cost assistance. Additionally, the program allows for a flexible down payment source, meaning that the buyer can use savings, gifts, or grants to cover the down payment. If you have family helping you to buy a home, this is one option you may want to consider. 

Are you a first-time homebuyer in Detroit? Don’t let the process intimidate you. There are many programs available to help first-time home buyers in Detroit achieve their dream of homeownership. Some of these programs are more well-known than others, but all of them can help make the home-buying process easier and more affordable. If you are a first-time home buyer in Detroit, be sure to research these programs and speak with a lender to determine which programs you may be eligible for that will also help you to realize your real estate goals.. With the right program and a little bit of help, you can achieve your dream of owning a home in Detroit. Are you ready to buy your first Detroit home? Reach out to Wise Property Sellers to find out how we can help you! (734) 968-4359

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