Nebraska offers a number of programs designed to help homebuyers.
This post outlines the benefits of NIFA programs. It explains how you can qualify, and guides you on which product will benefit you the most.
NIFA Loan Programs for Homebuyers
NIFA has four primary loan programs to help homebuyers.
I've gone through a detailed the differences in each. Some help minimize cash out of pocket needed, while others minimize the interest rate as much as possible.
NIFA Homebuyer Assistance Program
The Homebuyer Assistance Program is designed to help first time homebuyers with minimal savings.
Typically, to purchase a home you need to have enough cash to provide a downpayment and complete your portion of closing costs.
This program creates an additional loan that finances these expenses.
This second loan carries an amazing low interest rate of 1%, and a standard term of 10 years. The maximum amount this loan can be is 5% of the final purchase price.
The downside of this program is a higher interest rate on your primary loan.
Benefits of Homebuyer Assistance Program
The biggest benefit of the Homebuyer Assistance Program is making home ownership possible for those who otherwise couldn't afford downpayment and closing costs.
Example of Interest Rates for Homebuyer Assistance Program
Below are the current interest rates offered for the Homebuyer Assistance Program. This page was updated on September 21, 2018. To see the latest interest rates, please visit this page.
First Home Plus Program
The First Home Plus program is designed for first time home buyers who do not need additional funds to help with down payment and closing costs.
Unlike the Homebuyer Assistance Program, this is a single loan. The loan can be either a government or conventional loan.
Benefits of First Home Plus Program
The biggest benefit of the First Home Plus loan is a fantastic low interest rate.
As of September 13th, the Freddie Mac average interest rate was 4.6%. According to Bankrate, the average interest rate is actually higher in Nebreaska, at 4.8%.
Unfortunately, many do not qualify for “the average”, and banks charge a higher fee.
The First Home Plus loan gives access to a standard, low 4.5% interest rate to everyone who qualifies.
Another benefit of the program is lower mortgage insurance premium.
Example Interest Rates for First Home Plus Program
First Home Focused Program
The First Home Focused program is designed to incentivize investment in targeted areas throughout Douglas County.
Structurally, it is the exact same as the First Home Plus program, with added requirements and better interest rate.
To qualify, the property must be located inside a "target area". You can see a list of current target areas here.
Example Interest Rates for First Home Focused Program
Military Home Buyer Program
The Military Home Buyer Program designed to help active military and qualified veterans purchase a home.
This program is straight-forward, offering great low interest rate through government loans.
Example Interest Rates for Military Home Buyer Program
NIFA Loan Eligibility
Unfortunately, not every buyer is eligible for NIFA programs.
Below is a summary of the various NIFA eligibility requirements. If you need further assistance, feel free to reach out ([email protected]).
NIFA First Time Homebuyer Definition
Many people assume that they don't qualify for first time homebuyer programs because they've previously owned a house.
With NIFA, that's not necessarily the case.
To qualify for first time homebuyer programs, you cannot have owned and lived in a home as your primary residence within the past three years.
This means that if you previously owned a home, but it was more than three years ago, you can still qualify as a first-time home buyer.
Exceptions to the Three Year Rule
NIFA carries a few exceptions to this general rule to accommodate certain buyers.
They are all straight-forward. If you fall under one of these categories, together with your lender I can make sure that proper documentation is gathered.
NIFA Loan Income Limits
All programs carry an income requirement. Income requirements fall in two tiers: families with under two members and families with more than two members.
In Douglass county, the income limit for two member families is $81,600. If you're family has more members, you can earn up to $93,840 and still qualify for NIFA programs.
How NIFA Calculates Income
NIFA calculates your income in two parts.
First, they look at all gross income made before taxes for everyone over 18 who will live in the house as a primary resident.
This includes tips, commissions, bonuses, and social benefits such as social security.
NIFA will look at what you make in the current month, and extrapolate that over a 12 month period to determine your eligibility.
NIFA Maximum Purchase Limits
Additionally, the home that you buy must fall under certain price restrictions.
Like interest rate benefits, NIFA distinguishes between target and non-target areas. Home buyers who are purchasing a home within a target area are allowed to increase the purchase price of their home and still qualify.
NIFA Credit Check Requirements
Because NIFA works with banks, they carry similar credit checks on all borrowers.
The final requirements depend on your current credit score. Ultimately, a better credit score will allow you to borrow more relative to your income.
Homebuyers must carry a minimum credit score of 640, and a final debt to income ratio no more than 45% to qualify for all programs.
If you're credit score is 660 or above, your debt to income ratio may be up at to 50%.
I would love to help you secure financing for your next home. I've developed a number of great relationships with local mortgage professionals. Shoot me an email at [email protected] or a text at 402.312.9447 and we'll set something up!