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First-Time Homebuyer Programs in Georgia

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Buying your first home in Georgia offers a ton of opportunity as home values continue to appreciate in 2024 thanks to a much growing economy and influx of new residents moving into the state. There are several first-time homebuyer programs in Georgia designed to turn the dream of owning a home into a reality.

I’m going to show in you in this article some of the first-time homebuyer programs in Georgia that are available including down payment assistance as well as grants.

Why are First-Time Homebuyer Programs in Georgia so important?

The State of Georgia recognizes that the path to homeownership can be challenging, particularly for those stepping into the real estate market for the first time. Specifically, the amount of money needed in both the down payment and closing costs to purchase a home can be a major financial obstacle for first-time buyers, who may have limited savings and income.

As such, the Federal government through the GSEs such as Fannie Mae and Freddie Mac, the Georgia Department of Community Affairs (DCA) and private institutions have developed programs to assist with down payments, closing costs, and even credit counseling. These programs are designed to support individuals and families in achieving their goal of homeownership.

Standard Programs and Loans for First-Time Homebuyers in Georgia

Georgia Homeownership Programs offer various loan options specifically tailored for first-time home buyers. 

The Federal Housing Administration (FHA) Loan

FHA Loans are a go-to for many first-time buyers due to their low down payment requirements and more flexible credit criteria. The FHA insures the loan, giving lenders more confidence to offer favorable terms to applicants without substantial credit history or high-income profiles. In our opinion, the FHA loan is the easiest loan to qualify for most first-time homebuyers.

Some key highlights about the FHA loan is the minimum down payment of only 3.5% and a maximum housing debt to income ratio of 47% and a maximum “back-end” debt ratio of 57%.

For most counties in Georgia, the maximum FHA loan amount as of 2024 is $649,750 for a single family home.  Read more about FHA loan limits in Georgia.

97 Conventional Loan

Conventional Loans are available through traditional banks, mortgage lenders and mortgage brokers. Historically, accessing conventional loans used to be difficult for first-time buyers due to the higher down payment requirement and credit scores.

However, they have become more accessible to first-time home buyers through tailored options with lower down payment requirements. These loans offer the advantage of potentially lower interest rates and the absence of mortgage insurance after a certain equity threshold is met.

For first-time homebuyers in Georgia, the minimum down payment is 3%, hence the name “97 Conventional Loan”

United States Department of Agriculture (USDA) Loans

USDA Loans are a perfect fit for those seeking the affordability and space of rural Living. These loans come with no down payment and favorable terms, primarily supporting individuals and families in areas specified by the USDA as eligible.

Georgia has many different USDA eligible areas and you can find whether or not your area qualifies for here.

To qualify for a USDA loan in Georgia, you’ll want to have a minimum 640 credit score and your income may not exceed more than 80% of the area’s median income (AMI).

VA Loans

VA Loans are loans guaranteed by the Department of Veterans Affairs and available for veterans, service members, and eligible spouses. These loans offer many benefits such as no down payment requirements, competitive interest rates, and limited closing costs.

In Georgia, eligible buyers can obtain a VA loan up to $766,560 with no down payment required.

THE DOWN PAYMENT RUNDOWN

Local and government Down Payment Assistance and Grants for first-time homebuyers in Georgia

Down payment assistance and grants can be a game-changer, particularly for first-time home buyers. This financial support, often in the form of non-repayable grants or second mortgages, can significantly reduce the upfront cost of purchasing a home, making the option more feasible and affordable.

Georgia Dream Homeownership Program

The Georgia Dream Homeownership Program is a statewide initiative offering fixed-rate second mortgages for down payment assistance that be coupled with an FHA, VA, USDA, or conventional mortgage loans.

As of 2024, Georgia Dream helps provide a down payment assistance up to $10,000 with the Standard program, $12,500 for Protectors, Educators and Nurses (PEN), and $12,500 for those with disabilities or have someone who’ll live in the home that has a disability through their CHOICE program.

Gwinnett county HomeStretch Program

First-time homebuyers who are looking to buy in Gwinnett county may look into the HomeStretch Program for down payment assistance. The HomeStretch program offers up to $10,000 in down payment assistance as a five-year deferred payment loan with 0% interest. The loan does not need to be repaid as long as the homebuyer occupies their home as their principal residence for a period of at least five years. 

The program requires completion of an 8-hour HUD-approved Home Buyer Education Course and meeting certain income and credit requirements.

Clayton County Down Payment Assistance

Clayton County, located just south of Atlanta, offers a similar program for first-time homebuyers who are looking to buy in this area. The Clayton County Down Payment Assistance Program provides up to $10,000  in assistance for those looking to buy within the county while Veterans, protectors and county employees can receive up to $15,000 in assistance

The down payment assistance is offered as a second mortgage loan with a five-year deferred payment period with 0% interest. The program requires completion of an 8-hour HUD-approved Home Buyer Education Course and meeting certain income and credit requirements.

The maximum purchase price allowed for the Cobb county down payment assistance program is $250.000

The program requires completion of an 8-hour HUD-approved Home Buyer Education Course and meeting certain income and credit requirements.

Invest Atlanta Down Payment Assistance Program

Invest Atlanta offers a down payment assistance program for first-time home buyers in the city of Atlanta. The program provides up to $10,000 in financial aid that can be used towards down payment and closing costs. To qualify, applicants must have a minimum credit score of 640 and meet certain income requirements based on household size.

Fannie Mae Special Purpose Credit Program

Fannie Mae’s Special Purpose Credit Program offers a non-repayable grant up to $5,200 in assistance for first-time homebuyers who current live in a designed area tract of the city.

Since 2023, this program has become a favorite of ours as it doesn’t have any income limitations and it is not a second mortgage and does not need to be repaid.

To qualify, applicants must qualify for a conventional loan.

Fannie Mae HomeReady Program

Fannie Mae also offers the HomeReady program which allows low to moderate-income borrowers to access loans with down payments as low as 3%. In 2024, a new benefit of a $2,500 credit for very low-income borrowers was expanded within the program.

Other advantages include lower interest rates and lower private mortgage insurance premiums.

Freddie Mac HomePossible Program

Similar to Fannie Mae’s HomeReady program, Freddie Mac’s HomePossible offers a down payment as low as 3% as well as reduced interest rates and more favorable mortgage insurance premiums.

Private Lender Down Payment Assistance and Grants for first-time homebuyers in Georgia

The following are a list of privately-owned mortgage lenders and banks that offer down payment assistance through mortgage brokers like us for first-time homebuyers. These programs often have less “red tape”, are more flexible, and borrowers can be approved much faster than some of the state-issued mentioned in this article.

Chenoa Fund by CBC Bank

The Chenoa Fund by CBC Bank offers a second mortgage of either 3.5% or 5% of the purchase price for assistance that can be used towards down payment and/or closing costs. This program follows the same qualifications as an FHA loan.

Orion Lending Boost Down Payment Program

The Orion Lending Boost Down Payment Program offers a repayable second mortgage of 3.5% or 5% for assistance that can be used towards down payment and/or closing costs. The minimum credit score to qualify is 580.

Orion Lending Aurora Down Payment Program

Orion Lending’s Aurora DPA program offers a forgivable down payment assistance program up to 3.5% of the purchase price. Double wide manufactured home may be eligible for this assistance program.

Rocket Mortgage One+ Program

The Rocket Mortgage One+ Program offers a non-repayable grant up to 2% of the purchase price for first-time homebuyers. 

First-time homebuyers in Georgia must contribute with a down payment of only 1% while Rocket Mortgage contributes with the other 2% for a total of 3% down. The program has an income restriction of no more than 80% of the area’s median income and a maximum loan amount of $350,000.

Equity Prime Mortgage Empowered Down Payment Grant

Offered by Equity Prime Mortgage (EPM) through mortgage broker partners, the Empowered program is a 2% or 3.5% grant that is forgiven after 6 months of occupying the residence. 

The minimum credit score to qualify is 580 and has a maximum debt to income ratio of 49%. There are no income limits for this program.

The Application Process for First-Time Home Buyer Programs in Georgia

Applying for a first-time home buyer program in Georgia can seem complex, but with the right guidance, the steps can be managed effectively.

Steps to Apply

The application process typically involves several stages, including pre-application, submission of required documents, program-specific qualifying steps (such as credit checks or property appraisals), and final loan approval.

Documents Needed

Prospective buyers will need to gather various documents, including identification, financial statements, employment verification, and any other records requested by the program administrator. Organizing and preparing these documents in advance can expedite the application process.

Apply for a Georgia first-time homebuyer program with Andes Mortgage LLC

As a mortgage broker in Georgia, Andes Mortgage LLC provides access to all of the programs that are mentioned in this article.

To see what is the best fit for you, give us a call at 770-740-4050 to speak with one of our experienced Mortgage Advisors or submit an inquiry on our website by clicking the link below.

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