It really is a great time to be a first time home buyer because not only are rates historically low, but the Tennessee Housing Development Agency (THDA) is providing very low rates themselves. As of today, their Great Rate is 3.95%, the Great Advantage rate is 4.25% and the Great Start rate is 4.55%. As you can see, if you are a first time home buyer with a credit score in the mid-600′s, now is the time to apply for a home loan.
Just to give you a little history about the agency, the THDA was created in 1973 by the Tennessee General Assembly. The assembly’s stated purpose for the THDA was “to promote the production of more affordable new housing units for very low, low and moderate income individuals and families in the state, to promote the preservation and rehabilitation of existing housing units for such persons, and to bring greater stability to the residential construction industry and related industries so as to assure a steady flow of production of new housing units…”
It is important to remember that the THDA loan process is a two-pronged one. First, the buyer must go through the FHA process. Then, second, they go through the THDA process. The buyer must get documents from both processes signed, so when you buy a house, you need to give yourself enough time to get the proper paperwork finished. Make sure the seller understands the process as well, so there will not be any miscommunication.
With THDA rates so low, it would be wise to get your financial situation in order if your are looking to buy a home. You really can get a great deal on a mortgage, and it is worth the time and energy to see if you qualify. Take some time to talk to a home loan professional so you can understand exactly what you need to do to start the process.
This is great news! If you are a first time homeowner and have had a job for at least two years, have a good credit history and score and meet all the THDA income qualifications but don’t have any down payment money, you may be able to utilize a new program from THDA. Basically, THDA is loaning you a second for up to $7,000 for the down payment and closing costs with the understanding that once you file your taxes and get the tax credit back from the government you will pay the second off. It’s a interest free loan and you must pay it back.
You will also be required to attend a home owner education class put on by THDA as well as work with a THDA qualified lender. It’s a great way to own a home as long as you meet all the other qualifications. If you would like to talk to someone about qualifications, let me know and I will hook you up with a THDA lender here in town. You will always want to make sure you qualify for a loan before looking at property. It saves you time and the emotional roller coaster of finding a home to realize you can’t purchase it due to not being able to qualify.
If you are currently in the market to purchase a home, now is a great time to buy. You will have to qualify for a loan and that could be more difficult than it has been in the past. It is no secret that the credit market in the mortgage industry has tightened. However, if you have 4% down and can qualify with a full documented loan the rates are still very good.
For those who don’t have money down but can qualify otherwise and are a first time homeowner, you have an option to do a THDA loan that includes a grant for down payment money. This is not free money and has to be paid back if you live in the house less than nine years. There are some other restrictions and you will need to discuss these with a THDA approved lender.
Inventory is up and you have a lot to choose from; rates continue to stay low; sellers are motivated to sell their properties; so what are you waiting for to find your new home?
Just a short update for first time homeowners; THDA has increased their rates on all of their programs. They include:
THDA Great Rate – 6.10%
THDA Great Advantage – 6.60%
THDA Great Start – 7.10%
Find a trusted lender that can help you with your loan if you are ready to purchase a home and need some help deciphering which mortgage is best for you. Some of the qualifications for these 3 programs are the same but they have different benefits based on your current situation. Not all lenders are approved by the Tennessee Housing Development Agency so you will want to make sure you start with an approved THDA lender. You can always contact me if you
There is nothing as miserable as purchasing a home and not being able to pay or maintain it the way you want too. This is why it is so important to make sure, to the best of your ability with your loan officer, that you can afford the property you are looking to buy. A lot of what you are hearing about on the news these days is a result of not knowing what you can comfortably afford and getting over your head.
That is not to excuse the loan officers that took advantage of some of their borrowers but it is up to you to get some knowledge about home ownership. One of the best places I know to take a home owners education class is through the Tennessee Housing Development Agency, also known as THDA. This wonderful organization is dedicated to helping first time home buyers but you do not have to be a first time home buyer to take the homeowners education class. After all, no one really wants to be haunted by their house!
For those individuals and families who have worked hard to save or are getting a gift for a down payment and/or closing costs and prepaid items, the Great Rate Program is right for you. You are rewarded with the best interest rate that THDA can give to you.
Even though you do have to meet the requirements of income and purchase price in the county you want to live in, you don’t have to attend a First Time Homebuyer Education class. However, it is never a bad thing to get as much education as possible before you buy your first home so you are welcome and encouraged to attend this class even though it is not required.
You will need to be approved by a lender that is certified by THDA to move forward with any one of the three THDA loan programs. Make sure you check with that lender for the most current rate available for this wonderful first time homebuyer loan.
THDA Great Advantage Program is a program to help those folks that have some money but not enough to cover all the down payment and prepaid items. It is very similar to the Great Start program, but instead of being able to get a grant up to 4%, the grant is for 2% of the purchase price.
Because you are actually putting some of your own money down, you get a little bit better interest rate. What I have noticed in the past is a .500% difference (for the better) from the Great Start Program. Of course, as with all THDA loans, you have to meet the guidelines for income that is based on how many people you will have living in the house with you as well as the purchase price for the home. This cost is per county and your lender can look that up for you as well as give you a current interest rate for this program.
You will also be required to go to and complete a Home Buyer Education class. This class will help you prepare for and maintain owning a home and I highly recommend it for anyone wanting to purchase a home for the first time. If you have any questions or concerns, give me a call or email and I will answer any questions you may have or get you in touch with someone who can help you.
The Great Start program administrated by the Tennessee Housing Development Agency or THDA, is primarily for first time home buyers who do not currently have enough money to meet the FHA, VA or conventional loan requirements. To get started and purchase a home you will need to have at least 3% currently and 3 ½% starting January 1, 2009. The THDA Great Start helps you obtain a grant for up to 4% toward down payment and pre-paid expenses.
All three of the THDA loan programs for first time home buyer have certain restrictions based on the county you live in that include; acquisition cost and income. Income is dependent on how many people are living in the house as well. As with all loans you will be expected to qualify and provide a full loan documentation set that includes; W2’s, tax returns, bank statement, statements of additional assets and proof of residence.
Though the interest rate on a THDA program is set ahead of time, with the volatility of the market, it would be irresponsible of me to list the current rate just in case something changed after I write this blog. With that said, I recommend you check with a preferred THDA lender for the current rate. All of the loans are 30 year fixed loans and have a recapture tax provision that your lender should explain in full. Of course, if you have any additional questions, please don’t hesitate to email or call me.
Though Tennessee Housing Development Agency (THDA) has been around for 35 years, it amazes me how many people do not know about the wonderful loans they provide to first time home buyers in the State of Tennessee. These first time programs continue to be THDA’s main focus even though they have recently developed programs for renters and home owners who currently hold adjustable rate mortgages that they are struggling to pay.
THDA provides those first time home owners who qualify, with fixed rate, 30 year mortgage with manageable interest rates. Each program is slightly different and I am going to be blogging over the next week or so and breaking each one of the programs down into digestible bites in order that we all understand how they work and what is required by each loan program.
Have you heard about the latest tax credit for first time homeowners? If you purchase a home between April 9, 2008 and June 30, 2009, you may be eligible for a tax credit. You will need to check with your accountant or tax preparer to find out if you qualify for this credit or not. Like all such tax issues, this will depend on a number of factors.
But before you jump up and down with delight, you need to know that this credit is more like an interest free, fifteen year loan. In other words, you have to pay it back over time (15 years). You will be able to claim the lesser of $7,500 or 10% of the price of your home. Basically, any home over the selling price of $75,000 can claim $7,500 and a purchase price under $75,000 will be eligible to claim up to 10% of the purchase price.
There are nuances about when you have to start paying the credit back, what happens if you sell your home before you get the credit paid back in full and what if you sell your home at a loss? These are all things you will need to go over with a tax preparer.
If you have used another government program like THDA to buy a home during this time frame, you cannot qualify for this tax credit. A family or person can use only one type of assistance to get into a home. Just like THDA, there is an income cap that must be met for qualifiers. For this tax credit, if you’re single, the credit is not available if you earn more than $75,000 per year, or $150,000 for joint filers. It is unavailable completely if you earn $95,000 individually or $170,000 jointly.
The government is attempting to boost the housing market and get the economy started with this tax credit. However, be very careful and make sure you qualify for it before you start making plans to buy because if you don’t qualify, it could be a tax nightmare. Again, check with the person or company that does your taxes and make sure this is a good move for you to make.
