Unfortunately, if you listen to the media, they would have you believe that there are no first time homebuyer programs available in this market. That is not true. In almost every state and local municipality there are funds available to First Time Homebuyers. In this article I will try to outline for you how those programs work buy your first home in Arizona.
Local Governments
The first thing you’re going to want to do is go to your state’s website and search for these programs. For instance in my state, California, you would go california.gov. There is a tab labeled grants. On your state it may be different, but there will be something there. Also, you can locate your county and city websites and do the same search and you will find what they have available. It may even have a list of the lenders that have the programs available.
The Federal Government
Recently the government took away DPA’S ( Down Payment Assistance Programs), however HUD (Housing and Urban Development Agency) has homes that they have taken back and they make those available to home buyers at a substantial discount. These homes may be in need of work but they can be purchased sometimes with very little out of pocket expenses they can be found at hud.gov and search in your state for properties.
FHA/IRS
Recently congress passed an economic stimulus package and, among other things, included a First Time Home Buyer Program. In this program if you haven’t owned a home in the last 3 years you will qualify. This works by giving you a tax credit of $8,000 as an enticement to buy a property. As you may know the real estate market has taken a major downturn in the last couple of years and this incentive is available to anyone.
This is how that program works. You get a tax credit from the IRS, this not a tax deduction it is a credit off of the taxes you owe.
For instance, let’s say you file your income taxes and you are getting a refund of $3,000. If you buy a property you will get an extra $7,500 dollars for a total of $10,500. This can be used for whatever you want to use it for. Now let’s say you buy a property for $200,000 and you get a FHA loan with 3.5% down that’s $7,000, you’ve just bought a $200,000 home with no money down and you have $1,000 extra to furnish it with.
