Georgia First Home Buyer Assistance Programs in 2022

Are you tired of renting, living with roommates, or crashing in your parents’ basement, but don’t have enough money for a 20% down payment? We understood.

Not all first-time home buyers have saved enough to put down a down payment. But there’s good news for first-time home buyers in Georgia: you don’t necessarily need a large down payment if you’re in a low-to-moderate income bracket and have decent credit. .

In fact, Georgia offers home purchase assistance loans and down payment grants that provide a financial boost to help make buying your first home more affordable. Ready to know more? Here’s a closer look at the programs, eligibility requirements, and details on how to buy your first home in the Peach State.

Georgia’s dream loan

the Georgia Department of Community Affairs, or DCA, helps lenders provide affordable mortgages to low-to-middle income first-time homebuyers, or buyers buying a home in a targeted area. (Targeted areas are census tracts designated as economically distressed.)

The DAC offers a Georgia Dream Loana 30-year fixed rate loan backed or guaranteed by FHA, VA, USDA, or conventional loans.

“The borrower also benefits from lower interest rates and rates that don’t fluctuate as often as the normal market,” explains Armand Moralesan officer with Compass in Atlanta.

Another benefit of using the program? You may also qualify for a Georgia down payment assistance program.

Georgia down payment assistance

So you’ve analyzed the numbers and found that you can vary monthly mortgage payments. But how are you supposed to save for a down payment while paying for rent and bills?

If you use the Georgia Dream Loan program, you may qualify for an interest-free mortgage, which may also help pay for closing costs and other fees.

“A grant from the Georgia Dream is great for the buyer,” says Morales.

Down payment assistance options

The Georgia Dream Down Payment Assistance Program is divided into three categories and amounts:

  • The STANDARD, which amounts to $7,500 for all eligible buyers
  • The PEN, which amounts to $10,000 in down payment assistance for protectors, educators and nurses (i.e. PENs), as well as active military homebuyers
  • The CHOICE, which is $10,000 offered to homebuyers who are housing a family member living with a disability.

And although these are loans, you don’t have to make monthly payments unless you sell, refinance, or no longer live in the home as your primary residence. If any of these situations occur, the funds you pay back work in a “pay-as-you-go” way, as the program uses the money it recovers to help the next generation of homebuyers.

Georgia Aid Eligibility Criteria

In addition to being a first-time home buyer, meaning you haven’t owned a home in at least the past three years, here are some of the qualifications you need complete to receive assistance with the purchase of a home in Georgia:

  • Your income must not exceed the set limits, which vary by county and household size.
  • You will need a credit score of 640 in most cases.
  • You cannot have a debt ratio higher than 50%.
  • Your liquid assets must not exceed $20,000 or 20% of the sale price of the house, whichever is greater.
  • The sale price of your home must not exceed the limit indicated by the county.
  • You must complete a homeowner education workshop, an individual housing counseling session, or an online homebuyer education course to get a mortgage or receive down payment assistance.
  • You must choose a participating lender from the program list.
  • You will need to contribute a minimum of $1,000 of your own money (or documented donation funds) towards the purchase transaction.

A breakdown of liquid assets and debt to income ratio requirements

Sometimes the terms used by mortgage lenders are confusing. Take “liquid assets” and “DTI”, for example. What exactly are they and how do they affect your loan approval?

“‘Liquid assets’ are considered funds available in your checks, savings, stocks or other readily salable assets,” the mortgage lender says. Alvaro MoreiraGeorgia Mortgage Company owner Moreira Team. Assets can also include substantial gifts, IRA/retirement funds, or even cryptocurrencies.

And why is a debt-to-income ratio so important? Lenders use the DTI to assess your ability to manage monthly payments and repay debts. (They want to make sure you won’t be overworked when you start paying off your loan.)

If your lender determines that your DTI is too high, there are ways to lower it.

Moreira says a good start is to look at your car loan. If possible, refinance the loan at a lower rate and payment. Next, review your credit cards and pay off the ones with the highest payment-to-balance ratio.

And if you have high student loans, the good news is that student debt rating standards are being relaxed slightly these days. But it’s always a good idea to try to pay off your loans with high interest rates.

Help with buying a first property in your backyard

Georgia has some great programs statewide that might better meet your financial needs than the Georgia Dream programs. So be sure to check what local support is available in the areas you’re hoping to buy from.

For example, if you are shopping for a home in Atlanta, you could recover up to $20,000 for the down payment and/or closing costs through the Home Buyer Assistance Program. Invest in Atlanta. Some loans will also be fully forgiven, meaning you don’t pay a penny after living in the house for five to 10 years. But, of course, it all depends on how much you borrow.

Or maybe you have your heart set on moving to Savannah. the DreamMaker Home Buying Assistance The program provides up to $7,500 in down payment, closing costs and/or gap financing assistance to qualified first-time home buyers looking to live in the area.

How to start

Whether you check all the eligibility boxes or have a question about them, the Georgia Dream program suggests you chat with a participating lender to pre-qualify.

It typically takes about 60 days to process a Georgia Dream loan, from application to closing. And while this request is being processed, you can follow one of the required steps home buying education course.

Then, once you’re pre-approved, you can start working with a buyer’s agent to find your first home in the Peach State.

About Teresa G. Wilson

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