First just keeps getting better

There’s never been a better time to be a first-time homebuyer.

As home prices continue to decline across the nation, unprecedented opportunities are arising for buyers in general and first-time homebuyers in particular.

Federal Housing Administration
The Federal Housing Administration allows buyers to purchase a home with a down payment of only 3.5 percent. This can come from the borrower’s own funds or via a gift from a close relative. There is an upfront mortgage insurance premium (financeable) of 1.75 percent of the loan amount and a monthly mortgage insurance premium, but FHA allows lower credit scores than conventional loans and often more flexible qualifying requirements. FHA has strict property guidelines so you’ll want to work with your real estate and financing consultants to ensure your future home is a match.

For buyers interested in purchasing one of the many foreclosures in need of extensive repairs, the FHA has a program called a 203(k). This is a rehabilitation and repair program that allows buyers to borrow funds to buy their home with enough to do at least $5,000 of rehab and repair work.

Conventional Loans
Credit requirements for conventional loans are much tighter than with the FHA, but borrowers bypass the upfront premium. Property restrictions are not as stringent, appraisals are less involved and the paperwork is significantly reduced. Don’t let the headlines dissuade you; there are excellent conventional loan programs available to homebuyers with good credit, particularly those with a down payment of at least 10 percent.

Down Payment Loan Assistance
San Francisco offers some of the best and most generous down payment assistance loan programs in the nation. There are programs for first timer buyers, teachers and policemen. Visit the Mayor’s Office of Housing Web site at hwww.sfgov.org/site/moh and click on the “First Time Home Buyers” tab for program details.

Don’t wait until the last minute. There’s been increased discussion and evidence of an upcoming market recovery. Take control today, and take advantage of low rates, low housing prices and substantial financing opportunities while they are available.

 Pamela Lamarre and Tracy Dearman are business partners and head California State Funding Group and HSM realty finance management, respectively. For a free consultation, CMA or more information about the mortgage market, email Lamarre at plamarre@sbcglobal.net or Dearman at tdearman@hsmsf.com. For additional information, visit www.hsmsf.com.

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