Buying your first home is one of the biggest days in the lives of most Americans. Home ownership is a big part of the American Dream. A home is not only a place to provide shelter but also serves as the single largest asset that the average American owns. Yet, many people struggle to save money for a 10% to 20% down payment, qualify for a mortgage, or find an affordable home. Luckily, there are a variety of loan programs, grants, and other incentives available to help first time home buyers in Mississippi.
What National Programs Are Available?
FHA Loan Program
The Federal Housing Administration is part of the Department of Housing and Urban Development and has been helping Americans become homeowners since 1934. The FHA does this by insuring a mortgage originator against default risk. Mortgages insured by the FHA are a great option for first time home buyers because borrowers are allowed to put as little as 3.5% of the purchase price down on their home. There is, however, a limit on the price of the home you can purchase through this program that is based on the average home price in the area.
Fannie Mae HomePath Ready Buyer Program
One of the ways that Fannie Mae is trying to help home buyers is through education. Fannie Mae’s HomePath Ready Buyer Program provides buyers with four hours of education about buying a home and the responsibilities of homeownership. The course costs $75, but that fee is refunded if you purchase a HomePath property through Fannie Mae. Participants in this program can also get assistance with up to 3% of their closing costs.
United States Department of Agriculture Rural Development Loan Program
The USDA Rural Development Loan Program assists approved lenders in providing low to moderate-income households the opportunity to own a home in an eligible rural area. Mortgage funding may be scarce in these areas, so the USDA loan program reduces lending risk by insuring these mortgages. Buyers are often able to borrow up to 100% of the purchase price. Borrowers cannot exceed the program’s income limits.
The Good Neighbor Next Door Program
If you are a community hero, the Department of Housing and Urban Development has a special home buying program for you. The Good Neighbor Next Door initiative assists law enforcement officers, firefighters, emergency management technicians, and teachers with the purchase of homes in communities in need of renewal and revitalization. Purchasing a home through this program provides a 50% discount off the list price of eligible properties.
Are There Mississippi-Specific Programs?
Mississippi Home Corporation HOME Grants
The Mississippi Home Corporation together with the Community Services Division of the Mississippi Development Authority offer grant funding to qualified low-income individuals who want to purchase a home. Grants are available for $25,000 but cannot exceed 50% of the purchase price. The buyer is subject to an affordability period and must not exceed the program’s income requirement. Only site-built, single family homes, condos, and town homes qualify for the program. Homes in Harrison County and the cities of Hattiesburg and Jackson are exempt from the grant program.
Mississippi Home Corporation Home Buyer Advantage Grants
If you are looking to purchase a home in the city of Jackson, you may be eligible for a Mississippi Home Corporation Home Buyer Advantage Grant. Household income cannot exceed the required income limits set by the grant program, and the amount of the grant cannot exceed 50% of the purchase price. The Home Buyer Advantage Grant has a 0% interest rate and is forgiven over 5 to 10 years of residency. The required residency period of five years for grants of less than $15,000 and ten years for grants over $15,000. Buyers who move before their required residency period is complete must pay back a portion of the grant based on the months of ownership.
Mississippi Home Corporation Home Buyer Advantage Downpayment Assistance Program
The Mississippi Home Corporation also assists home buyers with grant programs that can be used towards a down payment. Buyers cannot exceed the required income limits set by the Home Buyer Advantage program. There are two different ways to qualify for down payment assistance through this program. The Eligible Community Share program provides $14,999 in down payment assistance for pre-qualified home buyers in eligible communities and zip codes. The Credit Score Share Program offers additional down payment assistance of up to $25,000 for pre-qualified buyers. The Mississippi Home Corporation evaluates buyers for this program based on income and credit score.
Mississippi Home Corporation Housing Assistance for Teachers Program
Since there is a critical shortage of qualified teachers in rural Mississippi and other city public school systems throughout the state, the Mississippi Home Corporation provides an incentive for teachers to re-locate to these areas throughout the state. The Housing Assistance for Teachers Program provides special funding through a promissory note that converts to an interest-free grant if the approved applicant must participate as a licensed teacher for at least three years in a Mississippi school district deemed to have a critical shortage of teachers. Applicants must provide a minimum downpayment of 1% of the purchase price plus one month of reserve payments. Additional grant funding of up to $6,000 is also available to cover closing costs. There are no income limits in the Housing Assistance for Teachers Program.
2 Point Highlight
Luckily, there are a variety of loan programs, grants, and other incentives available to help first time home buyers in Mississippi.
The Mississippi Home Corporation together with the Community Services Division of the Mississippi Development Authority offer grant funding to qualified low-income individuals who want to purchase a home.
