The FirstDown program is available for first time home buyers in Pueblo, CO. Even though the program is used primarily for first time buyers, buyers who have owned a home within the last three years may also be eligible.
The FirstDown program combines FHA financing with a second mortgage trust deed for 3% of the sales price for 15 years. This allows qualified buyers in this program total financing of up to 99.5% of the lower of the purchase price or appraised value of a home. A second mortgage of the 3% will be added to your payment.
Eligibility is based on income, and credit qualifying is the same as the guidelines for FHA home loans. The income limit is 115% of Area Median Income as determined by HUD. In Pueblo, that income level in 2015 is $52,800 which means if you make less than $60, 720 or less you may qualify for this program.
Home buyers with no credit history or no credit score may still qualify. If you have a credit score FHA requires a minimum score of 580 to qualify for maximum FHA financing. This makes it easier for borrowers with less than perfect credit to qualify.
This program is designed for low to moderate incomes. You must occupy the home your purchasing … meaning this program is not available for investors. The percentage of gross income that can be allocated to expenses and debt payments (debt-to-income ratio) must meet FHA’s program requirements and must be in the range of 43-48% depending on your credit score and other lending factors.
Home buyer education classes are required. Neighborhood Works offers classes that will qualify you for this program and are free to attend. For more information on their programs see Neighborhood Works Pueblo for more information and class schedules.
As always, please take a moment to call Rick Thomas at 719-569-0735 so I can help explain these government programs to you. I’m not the lender and can not talk about specific interest rates, whether or not you will qualify, but I can explain the broad strokes of lending programs you may qualify for, and can get you in touch with the right lenders that can help you in the qualifying process.