First-Time Homebuyer Loans
What is a First-Time Homebuyer?
Most programs have a strict definition of a first-time home buyer. However, the term can be a bit misleading. Generally speaking, you’re considered a first-time home buyer if you haven’t had any form of ownership in any home in the last 3 years.
That means that, even if you have owned a home at some point in the past, you may still be eligible to participate in some first-time home buyer programs, provided it has been at least 3 years since you’ve owned a home and that you meet the other qualifying criteria.
NC Housing Finance Agency (NCHFA)
Mortgage Credit Certificate (MCC)
The MCC program operates as a federal income tax credit. The MCC reduces an eligible borrower's federal income taxes and, in effect, creates additional income for the you to use in making house payments. NCHFA offers a 30% tax credit amount (50% tax credit for new homes).
For example, a loan amount of $100,000 at an interest rate of 5% for 30 years would amount approximately $5,000 of interest in the first year. With a 30% MCC, you may be eligible to receive a federal income tax credit of $1,500 (30% of $5,000).
You can even reduce the amount of monthly federal income tax withheld by filing a revised IRS W-4 Employee Withholding Allowance Certificate in order to have more disposable income to make loan payments.
97% Conventional Loans
Fannie Mae and Freddie Mac both offer a special 97% Conventional product for first time homebuyers. These programs allow the ability to put down less money on your purchase and may also offer reduced Private Mortgage Insurance (PMI) rates.
- Freddie Mac Home Possible
- Fannie Mae Home Ready