Buying a home for the first time can be as stressful as it is exciting. A home purchase is a big financial decision, and it’s easy to get in your head about making mistakes as a first time home buyer that can cost you a lot of money. However, there are a few ways that you can mitigate your risk as a first-time buyer. One of the best ways to protect yourself financially is to find and use a First-Time Home Buyer Credit program!
Following insecurities in the housing market in the late ’00s, Congress passed The Housing and Economic Recovery Act of 2008. This was a stimulus plan that — among other things — allowed first-time home buyers to receive a tax credit that would help cover the costs of buying a home. At the time, this credit was for 10% of the purchased home’s value, up to a total of $7,500. Over the next few years, the legislature continued to tweak this program, raising the credit value to $8,000 and allowing first-time buyers to get the money either as a tax credit or as an interest-free home loan.
The purpose of these First-Time Home Buyer Credits was to allow more people to buy their first home. High levels of home ownership tend to be good for the economy — and ownership tends to be great for personal finances, too!
Recipients of the First-Time Buyer Credit pay no interest on the loan and have a 15-year window to make good on the debt. The Internal Revenue Service created payment plans so new homeowners can budget these special loan payments into their other monthly costs.
This program offered an amazing opportunity for people to start gaining the advantages of home ownership without having to worry as much about the high interest rates that were so common during this real estate bubble.
It sounds almost too good to be true, right? Well, there’s a catch…
If you’re like many people, you probably started dreaming about your home buying possibilities once you read that last section. Well, we hate to be the bearers of bad news, but this program is no longer an option for first time buyers.
Once the housing market began to stabilize and home ownership rates picked up, the federal government let the tax credit program fade away and began collecting payments. There are some stipulations for people who closed on their home before 2010, but anyone looking to buy a home in 2021 will not be able to take advantage of the credit.
The answer is maybe. There have been rumblings of another home buyer credit program coming since the election and inauguration of President Joe Biden, but nothing is set in legislation yet.
The new Home Buyer Credit would once again seek to help first-time home buyers take advantage of the current, unique housing market. COVID-19 protocols affected real estate in a few significant ways (although not the ways that you might expect!), and a new credit would help open up the market to people who want to maximize their buying power.
This could be great news for first-time buyers if it ends up coming to fruition. However, there is nothing in the books yet, so the details of any credit program are not known at this time.
Luckily, there are other options for first-time home buyers! The federal government’s tax credit program may have ended in 2010, but many state and local governments have their own loan programs.
According to the financial wizards at Nerdwallet, almost every state has a home-buyer credit. So if you are looking to live in Washington DC on a budget, then you’re in luck — Washington DC, Maryland, and Virginia all have unique first-time buyer loan options to help get you started. This is in addition to special mortgage options like VA-backed loans or Doctor Loan Programs. Let’s break it down by each region:
Mayland has several mortgage options for first-time buyers and repeat customers alike — but which one is right for you?
The Commonwealth of Virginia has a wide variety of unique loan options. The Virginia Housing Development Authority (VHDA) offers many different loan programs, including both loann options for first-time buyers and for those moving up to a more valuable home.
In addition to Virginia Housing Conventional Loans, Federal Housing Administration (FHA) loans, and Veteran’s Administration Morgage programs, VHDA has unique programs to help with the costs of down payments, closing costs, and more. These can be an attractive alternative to options like Bridge Loans or Home Equity Lines of Credit (HELOC).
There are a lot of mortgage options out there. Each one has its own pros, cons, and special qualifications. All told, it can feel very overwhelming to try to even figure out how to get a mortgage — especially if you are trying to buy (or sell) your home without a real estate agent!
You might know that having a great real estate agent on your side is key to finding and winning the right home. But it goes beyond that…the right agent will help you with the rest of your home purchase, too!
Have a question about closing costs on your home? A good agent will walk you through the process.
Not sure which neighborhood will offer the best commute for your Arlington VA job? Talk to your agent about it and find out everything you need to know about living in Arlington VA or one of the surrounding areas.
And, of course, your agent can help you identify the best mortgage for your needs and means, too! At the Keri Shull Team, we work with a collection of high-quality local lenders, including an in-house lender with HyperFast Mortgage. With this archive of expert lending knowledge, we can identify and utilize the loan program that is perfect for you and your new home!
Are you interested in learning how you can find and win your dream home without breaking the bank? Just contact the Keri Shull Team today or fill out the form below to schedule a time with our real estate specialists!
