What’s inside:
- Who qualifies as a first-time homebuyer?
- How Mississippi helps first-time homebuyers
- Mortgage Revenue Bond 7 homebuyer program
- Smart Solution homebuyer program
- Credit Certificate homebuyer program
- Housing Assistance for Teachers homebuyer program
- Other homebuyer options
Many Americans dream of owning a home, but it’s not easy. The costs are high and the process stressful, and most buyers need a loan. Fortunately, there are state and local programs that make it easier to achieve this lifelong dream.
First-time homebuyers, especially in Mississippi, need to know more about the step-by-step process of buying a house. When it’s time to close the deal, homebuyers will want to be aware of the different grant and assistance programs that can lend them a helping hand.
To help future homeowners make the right decision, here is a short guide to the financing programs available for first-time homebuyers in Mississippi.
Who qualifies as a first-time homebuyer?
The United States (US) Department of Housing and Urban Development (HUD), defines a first-time homebuyer as:
- Someone with no ownership in a primary residence for precisely three years before purchasing the new property
- Someone who owned with a former spouse but is now a single parent or a displaced homemaker
- Someone who has owned a property that couldn’t meet state, local, or model building codes
Remember: most programs look at an applicant’s assets, income, or credit score. They also consider the house’s location.
How Mississippi helps first-time homebuyers
In Mississippi, statewide programs are typically offered through the Mississippi Home Corporation (MHC). Here are a few of the options provided by the MHC:
- Down payment assistance, including loans and grants. A down payment is a large expense, and it is required for most types of mortgages. The good news: there are lenders that loan to first-time buyers for as little as 3% down payment.
- Government-backed loans. A federal government loan can also help homebuyers purchase a home without putting a down payment.
- Tax credits. Federal and state tax deductions can lower your taxable income.
- Closing assistance. Aside from down payment assistance, public and private programs can help first-time homebuyers settle closing costs through a loan or a grant.
Mortgage Revenue Bond 7 homebuyer program in Mississippi
The MHC has the Mortgage Revenue Bond 7 (MRB7) program, which provides a 30-year fixed-rate mortgage. Up to $7,000 in a deferred 10-year second mortgage with zero interest can be applied to closing costs. In addition, those buying a house in a target area may get additional benefits. The MRB7 program is ideal for down payment and closing assistance.
Smart Solution homebuyer program in Mississippi
The MHC also has the Smart Solution program that offers 30-year mortgages with lower mortgage insurance premiums. To be considered, one must have a credit score of at least 650 and a household income of no more than $95,000. The state program is an excellent choice for low mortgage rates and down payment and closing assistance.
Credit Certificate homebuyer program in Mississippi
The MHC’s Mortgage Credit Certificate lessens the amount of federal income tax a borrower has to pay, freeing up the income needed to qualify for a conventional mortgage. The program is designed for first-time homebuyers, veterans, or those who plan to buy a home in a designated target area. Note that the tax credit is capped at $2,000 annually.
Housing Assistance for Teachers homebuyer program in Mississippi
The MHC’s Housing Assistance for Teachers program offers grants of up to $6,000 to shoulder the down payment and closing costs.
The grant is for licensed educators who teach special education, math, foreign language, and science. The grant is forgiven as long as the teacher is with a critical shortage school district for at least three years and purchases a home in the district.
Other homebuyer options
Yes, of course. First-time homebuyers can apply for federal or national programs, such as:
- Fannie Mae HomePath ReadyBuyer
- The HUD’s Good Neighbor Next Door
- Federal Housing Administration loans
- US Department of Agriculture loans
- US Department of Veterans Affairs loans
- Fannie Mae and Freddie Mac loans
There are charitable programs, especially for those with low to moderate income. Habitat for Humanity and the Neighborhood Assistance Corporation of America are just a few of the organizations that can help.
There are so many factors to consider when buying a house. It’s okay to have plenty of questions, especially if it’s your first time. For more details, check with the Mississippi and local housing departments and with a real estate agent.
Want to own a house in a Mississippi community like Bay St. Louis, Long Beach, Gulfport, or Biloxi? Get in touch with Owen & Co. by calling them at 228.822.9870 or sending a message to info(at)owenandco(dotted)com. The team is happy to answer home buying questions and help make homeownership dreams happen.
