Bellevue, WA – First Time Home Buyer Programs
Are you a first time home buyer looking to purchase a home in Bellevue, Washington? On this page you can learn about some of the different types of mortgage programs that are available to first time home buyers. You may also view down payment assistance programs that are currently being offered in Bellevue, WA.
Bellevue, WA – First Time Home Buyer Loans
Below are some of the potential mortgage options that may be available to you.
Types of Mortgages:
- Conventional Loans – Conventional loans offer the best loan terms to borrowers with good or excellent credit, as well as those who can afford to place a larger down payment. If you are able to put 20% or more down, you will be able to avoid paying private mortgage insurance (PMI). However, conventional loans also offer low down payment options, such as programs that only require 3% down.
- FHA Loans – FHA loans are a good option for borrowers who may not be able to qualify for a conventional loan. The qualification requirements for FHA loans are much more lenient than conventional loans. This includes options for home buyers with credit scores as low as 500 (in order to qualify for a 3.5% down payment, you must have a credit score of at least 580).
- USDA Loans – USDA loans provide home buyers the opportunity to purchase a rural home without any down payment. These loans are intended for borrowers with low-to-moderate income. In addition to not requiring any money down, you can also finance the closing costs into the loan. This means you can essentially buy a home with no money out of pocket!
- VA Loans – Active duty military members and veterans can apply for a VA loan which allows you to buy your first home without any down payment. These loans are not available to the general public, but exclusively to military/veterans.
- Jumbo Loans – Any mortgage that does not meet the conforming loan limits is a jumbo loan. You can lookup the 2023 conforming loan limits for King County, Washington (or any other location) using this conforming loan limits calculator. If you want to buy a more expensive home, and have the income to qualify, jumbo lenders offer loan amounts up to $5,000,000.
- Non-Prime Loans – If you do not qualify for any of the above types of loans, you may consider a non-prime loan. These programs are helpful to people with a variety of credit issues (such as low credit scores, or a recent bankruptcy). Non-prime loans do not require any waiting periods after a bankruptcy, and most non-prime lenders allow credit scores as low as 500. Regardless of your situation, you should consider learning more about non-prime loans if you do not qualify for any of the other types of mortgages featured above.
These are some of the mortgage options that are available to first time home buyers.
Would You Like to Get Pre-Approved for a Mortgage?
Click Here to Get Pre-Approved for a Home Loan
Upon receiving your request, we will match you with a mortgage lender that offers first time home buyer loans in Washington State. You will be provided with a free consultation, and the opportunity to get pre-approved for a mortgage.
Bellevue, WA – Down Payment Assistance Programs
First time home buyers in Bellevue may be eligible to receive down payment assistance. You can learn about some of the down payment assistance programs being offered in Bellevue below.
ARCH
Also known as A Regional Coalition for Housing, ARCH is an enormous partnership of numerous counties in Washington, including Bellevue. Beyond assisting those looking for affordable housing, they work with local governments to develop policies, programs, strategies and development regulations to foster a collection of properties that are available solely for those that don’t make a lot of money.
ARCH is able to do their duty mainly through their Housing Trust Fund. This is how ARCH awards grants and loans to developments that build affordable housing. As of today, they have funded over 2,575 units around the Bellevue area.
Homebuyers looking for residences sold at restricted prices do not have to be a member but they do have to follow a certain set of guidelines and join the mailing list.
Requirements
- Interested buyers must successfully complete a Washington State Housing Finance Commission endorsed homebuyer education class. Once finished, the certificate must be mailed to ARCH so that interested parties can then be placed on the ARCH mailing list.
- Any home purchased must be occupied by the owner.
- Resale prices in the future are formula-based. This number is based on one of three indexes, including the REI Seattle/Everett Real Estate Report, the Consumer Price Index-housing (CPI) and an average of the REI and HUD median income for King County.
- Top priority is given to potential buyers that have incomes at or below current income guidelines.
- Should the owner plan to sell their home, the city has the initial right to either refuse to buy the property or assign it to a different buyer. This may be waived should too much time pass. Even so, the city still retains the right to approve any sale.
- The resale control agreement will be waved if there is a default and the mortgage is then assumed by the lender.
- Resale prices may go up if home improvements have been performed. The opposite is also true in that the resale price can decrease if the home has not been cared for.
Interested parties are encouraged to start the process of looking for affordable housing through ARCH by filling out an application. Once completed with the education class certificate turned in, they are added to the mailing list and sent regular notifications of affordable apartments to rent or homes now on the market.
House Key State Bond
Provided the individual qualifies for ARCH and manages to find a home, it’s now time to manage the financial aspect of the home buying process. In order to keep this affordable every step of the way, ARCH purchases automatically comes with a down payment assistance with the first mortgage loan program known as House Key State Bond.
House Key Plus ARCH is part of the Washington State Housing Finance Commission, a statewide team dedicated to helping make homes affordable for those less fortunate. In order to be approved for a bond, a future homeowner must successfully complete a homebuyer education seminar and meet with a commission-trained loan officer to determine just how much assistance they qualify for. Once completed, they can begin house hunting in earnest.
Benefits
- Up to $30,000 in aid with no monthly payments.
- Low simple interest of 4%.
- Loan balance due only if borrower sells home, pays off first mortgage or refinances.
Qualification Requirements
- The buyer’s income cannot be larger than $46,100 for a one person household, $52,650 for two people, $59,250 for three people and $65,800 for four.
- The home purchased cannot cost more than $354,000 and must be price restricted.
- The owner must use their new home as their primary residence.
- If this is a buyer’s first residence, they cannot have at any time in the past three years have owned a home.
- If the property is already occupied, the tenant cannot be displaced.
- The buyer has to qualify for the House Key State Bond.
- They must also attend a pre-purchase counseling session and a home education seminar.
Bellevue First Time Home Buyer Tax Credits
The Mortgage Credit Certification (MCC) tax credit provides you an opportunity to reduce your tax bill, as well as enhance your home loan application by reducing your debt-to-income ratios. How this works, is you can deduct up to $2,000 off your federal tax bill each year. The MCC allows up to 35% of your annual interest to be eliminated (with the cap being at $2,000). Some great news, is this can be used in addition to standard mortgage interest deductions!
Are You Eligible for Down Payment Assistance?
A mortgage specialist can help you check your eligibility for down payment assistance. If you would like to receive some help checking what down payment assistance programs you may be eligible for, fill out this form. We will match you with a mortgage lender that can help you see if you qualify for any down payment assistance.
First Time Home Buyer Questions
Below are some of the most frequently asked questions about first time home buyer loans:
How much do I need for a down payment?
The minimum down payment requirement will depend on the type of mortgage program. USDA and VA loans do not require any down payment. FHA loans only require a 3.5% down payment (and allow down payment assistance to be used). Conventional loans typically require either 3% or 5% down. The minimum down payment for a non-prime loan is usually at least 10% (or higher).
What is the maximum loan amount that I can qualify for?
The amount that you will be allowed to borrow will depend mostly on your income, as well as the particular type of loan you are interested in. There are maximum loan limits for each type of mortgage program which are set at the county level. Conforming loan limits are the maximum loan amounts allowed for conventional mortgages. FHA loans have their own loan limits. This is not necessarily how much you can borrow though, but the maximum amount allowed in your location. The amount that you can personal qualify for will be based upon your income, and how much debt you have. For most loans, your monthly mortgage payment, along with your monthly debts may not exceed 43% of your income.
Can I buy a home without a real estate agent?
It depends on your state and the type of loan program. For some states, you must use an agent. In other states, you are not required to use a real estate agent for many loan program, such as conventional mortgages. However, some loan types require that you use a real estate agent regardless of your location, such as USDA loans.
Are there mortgage loan options for borrowers with bad credit?
Yes, both FHA loans and non-prime loans are available to borrowers with lower credit score, and other credit challenges. The minimum credit score required for an FHA loan is 500. For non-prime loans, there are lenders that allow a borrower to have a credit score even below 500. Non-prime loans also do not have any waiting periods after a bankruptcy.
Can I buy a home if I owe tax debt?
For government-backed loans, such as FHA, VA, and USDA loans, you can buy a home with tax debt as long as you have made a payment plan with the IRS, and are not behind on the payments. Any federal debt must be in good standing in order to get a government-based mortgage. If your tax debts have moved into the status of a tax lien, this will prevent you from getting a home loan until it is resolved.
Can I buy a home if I have student loans?
As long as you are not delinquent on the student loan payments, and the monthly payments do not cause excessive debt-to-income ratios, you can still get a mortgage.
Can I buy a home without my spouse?
A common question is if you can buy a house without your wife or husband. The short answer is yes. There are numerous reasons someone may want to exclude their spouse from a mortgage application, such as lower credit, lack of job history or income, or one spouse having excessive debt that could prevent an approval. You may be able to qualify and get a home loan without your spouse.
How can I find out if I qualify for a mortgage?
A loan representative can help you determine what mortgage programs you may qualify for, and also check your eligibility for down payment assistance. If you would like to receive a free consultation, we can help match you with a mortgage lender that offers first time home buyer loans in Washington State.