How to Successfully Buy Your First Home During a Pandemic

Buying a home is more challenging than ever in today’s Pandemic-driven housing market.  While mortgage rates are historically low, so is inventory.  Housing prices in the U.S. are up an average of 4% vs. last year at this time, and many markets are consistently experiencing overbids and multiple offers.  

This doesn’t mean that first-time buyers should give up on buying a home, but it does take more planning, time, and effort.  Given below are some tips to help you more easily navigate the process.

Start with a housing counselor or lender and check out different down payment options.

As much as we love to look at houses online, you need to first make sure your finances are in order and determine what you can afford before you shop.  Many real estate agents won’t even show prospective clients properties without a pre-approval – and you’ll definitely need one prior to submitting an offer.  

Further, contrary to popular belief, you don’t need 20% down.  In fact, it’s more important to retain some savings to protect yourself from unplanned expenses. While many lenders are tightening up qualification requirements due to the pandemic, there are still many down payment assistance programs available that can help cover closing costs that will help give you an advantage over other buyers.   keep reading

Homeownership Program Index and the Impact of COVID-19 on Homeownership Programs

Down Payment Resource, the nationwide database for homebuyer programs, today released its Third Quarter 2020 Homeownership Program Index (HPI). The number of total programs is 2,340, and over 81 percent (81.1%) of programs currently have funds available for eligible homebuyers, down a little less than 2 percent from the previous HPI. 

Down Payment Resource (DPR) communicates with 1,138 program administrators to track and update the country’s wide range of homeownership programs, including down payment and closing cost programs, Mortgage Credit Certificates (MCCs), affordable first mortgages and more. 

Overall Impact

Though we’ve noticed a slight and mostly temporary drop in available programs at the city and county level, it’s important to note that state housing finance agencies (HFAs), which comprise nearly 24 percent of all programs, have not closed or paused business during the COVID-19 pandemic. 

Stockton Williams, Executive Director of the National Council of State Housing Agencies (NCSHA), discussed the COVID pandemic and its impact on HFAs and lenders in an interview in the June/July issue of the Down Payment Report.

According to Mr. Williams, “the last several months have been a tumultuous time for the mortgage finance system and everyone who is involved with providing housing lending. There have been lenders who have pulled back from originating loans for low- and moderate-income borrowers for a variety of reasons, including general economic stress, or pivoting to do more business in refinances since rates are so low. keep reading

The Importance of Down Payment Assistance Programs in a Pandemic

Economists agree that the real estate business has recovered faster than expected during the pandemic. A continued lack of inventory, low mortgage rates, and pent-up demand are all contributing factors to a robust market.

The good news for homebuyers is that down payment assistance is still available, with many program providers offering online and virtual support/education. With an average benefit of $13,000, these programs can help make the difference in achieving homeownership when competition is fierce.

In a recent appearance on the “Real Estate Coach Uncensored” show with Bernice Ross and Greg McDaniel, our very own Rob Chrane, CEO of Down Payment Resource, discussed the different types of down payment programs available and how they represent an opportunity for real estate agents and loan officers to expand their client portfolio.

Many prospective buyers are unaware of the scope of these resources or don’t think they’ll qualify. Our goal is to dispel several of the most common myths surrounding these programs:

  • Myth #1 – They’re only for first time buyers: Over a third of the programs don’t have a first-time homebuyer requirement. Further, previous homeowners who haven’t owned a home for at least 3 years can qualify as first-time buyers.
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