Individual Development Account Program GreatStart Bank’s Individual Development Account program, or IDA, partners you with participating organizations that match your savings contributions to help you save for a down payment or closing costs.
For example, the Community Investment IDA program will match $3 to your every $1 of savings, with a maximum of $5,000 towards a down payment or closing costs for your first home. In order to participate, you must attend home ownership counseling and set up a savings account at GreatStart Bank. You must also complete
GreatStart Bank’s financial education classes.
Homeowner Education Program
GreatStart Bank’s Homeowner Education program helps people understand the process of buying a home. It offers information on topics like budgeting, finding a home, getting a loan, and maintaining a home. The Federal Housing Authority (FHA) also has a program you can participate in called the Homeowner Education Learning Program, or HELP. If you plan to get an IDA, you must complete one of these programs.
Government Loan Program
GreatStart Bank’s loan officers can also identify a government loan program to help you, if you are eligible. Government loan programs are usually targeted to individuals and families with a modest income. These programs might have purchase price limitations, service charges, and higher loan origination fees. They also have one or more of the following characteristics:
Zero or low down payment requirements.
For example, some require a 3% down payment, and some require 5%, with 3% having to come from the borrower and 2% coming from other gifts or other grants.
More flexible underwriting standards.
This means the lender will consider non-traditional forms of proof of credit history, such as rent or utility payments, and higher ratios of debt compared to your income.
Longer payment terms than standard mortgage loans.
Home buyer Assistance Programs
There are a number of different programs available for first-time home buyers. Many people start the home buying process with one of these programs, or with a program offered by a local community organ
ization. The following are brief outlines of the most common home buyer assistance programs:
Federal Housing Administration (FHA) Insured Loans
The 203(b) is the most common FHA loan, featuring:
Low down payment; Flexible qualifying guidelines; Limited lender fees; Maximum loan amounts
Department of Veterans Administration (VA) Insured Loans
The Veterans Administration guarantees no-down payment loans for the purchase of new and used homes for eligible veterans or their spouses. The loans are guaranteed by the Veterans Administration but the loans are made through private financial institutions. The VA does not directly lend the money to the veteran. The maximum loan period is 30 years. Interest rates are about the same as FHA. VA loans are fully assumable.
Veterans must submit their discharge papers and once they are qualified, they obtain the Certificate from the VA. Veterans can recertify when the loan is paid off or the loan is assumed by another veteran using his eligibility.
Features of VA loans include:
You must be an eligible veteran; There are no down payment requirements; Competitive and negotiable fixed interest rates; Limitations on closing costs; Longer payment terms.
Federal National Mortgage Association (FNMA) Loans
The FNMA Community Home buyers Program features:
5% down payment; Expanded debt-to-income ratios (33% and 38%); You must attend home buyer education; You must earn no more than the median income for the area in which you live; One family principal residence.
