There are more and more Hispanics and Latinos interested in government aid to buy a house in USA; especially since interest rates have suffered a large increase in recent months.
Indeed, in 2022 the Federal Reserve has had to increase rates on several occasions, in order to stop the inflationary spiral in the country.
This has increased the cost of living for many foreigners and residents of the United States, including those who are part of the Hispanic community.
Current housing situation in the USA
Although many natives and foreigners dream of buy a home in the United StatesThis is getting more and more difficult.
Many experts predict that in 2023 there will still be a limited inventory of properties in the United States, and that their prices will continue to rise as well.
Between 2012 and 2019, the cost of housing in this North American country increased by more than 50% (recording the third most significant increase in its entire history).
If we add to this the galloping inflation that pulverizes the purchasing power of millions of people in the United States, the situation becomes even more tense.
In the same way, it should be noted that the rise in mortgage interest is a nightmare for many people who want to buy a property in the United States.
Consequently, in recent months these factors have aroused greater interest in government aid to cobuy caseto in USA.
Government aid to buy a house in the USA
According to a review of Forbes, only 10% of Hispanic homeowners are exempt from making sacrifices to acquire their first home in the US.
If you are not part of that percentage, but still want to become an owner, you need to know the main aid from the US Government to buy a house:
1. FHA Loans
It is a loan insurance program granted by the Federal Housing Administration (FHA).
They function as mortgage guarantees for lenders who have the approval of said administration.
That is, in the event that the owner of the house fails to meet its payment commitments, the FHA will be responsible.
This is one of the best government aid to buy a house in the USA, especially for people who do not have a good credit scoreor that they are just beginning to build it.
Requirements to apply for this government aid:
- Have credit score (Must be at least 500 points).
- Make a down payment equivalent to 3.5% of the price of the home.
- Use the loan on the buyer’s primary residence.
- The ratio between debt and income must be equal to 31% (in the case of housing) and 43% in total.
Advantages of these loans:
- Home purchase conditions are more flexible.
- You can become a homeowner (even if you have debt or a low credit score).
- Lenders may accept a lower down payment.
- The interest rate on the loan will be lighter. Therefore, the monthly payments will be more friendly to your pocket.
- The housing payment scheme will be less strict.
2. Fannie Mae or Freddie Mac loans
fannie mae Y Freddy Mac They are companies sponsored by the United States government. They are in charge of granting guarantees to the loans, and therefore, the lenders assume less risk.
These loans are also favorable for the applicants; especially since they offer you a 30-year fixed rate.
These government aids forto buy casa in the United States have a very striking feature: Specifically, they require a low down payment (just 3%).
Suppose you want to buy a $200,000 house and you get such a government grant, if so the down payment would be 3% (the equivalent of $6,000).
These mortgage programs can help you a lot if you have a job in the United States and your income is low or moderate.
Requirements to apply for this government aid
- The applicant for the loan must be the owner of the house.
- The purchased home must be your main residence.
- Some programs supported by these companies only allow the purchase of single-family homes.
- Certain aids have a loan limit of $417,000 (regardless of whether the home is purchased in a designated high-cost area, including Los Angeles or New York).
- The credit score minimum must be 620 points.
Main advantages of accessing this credit
- They are very helpful to people who need buy your first home in this country.
- Mortgage insurance rates are lower than those offered by other lenders.
- These loans do not require an upfront mortgage insurance premium.
3. USDA Programs
The United States Department of Agriculture has more than 30 programs to help workers year-round:
- Temporary domestic agricultural.
Financing proceeds may be used to build, improve, repair or purchase housing in urban or rural areas. As long as there is a demonstrated need.
If you are Hispanic, reside in the United States and carry out agricultural activities, or are part of a family agrarian society, you could apply for these government loans.
Requirements to apply for this loan
- Being a domestic farm worker. This means that a portion of your income comes from farm labor.
- Demonstrate that your income is low (less than 50% area median income), low (equivalent to 50-80% area median income), or moderate (up to $5,500 above the low income limit).
- Homes must be single-family.
It is important to clarify that only qualified applicants can receive housing loans and grants. These are:
- family farming societies,
- farmers associations,
- Non-profit organizations or,
- Farm workers associations.
Main advantages of this aid from the United States government
- The maximum repayment period is 33 years.
- They offer a fixed interest rate (equivalent to 1%).
- The houses are secure income.
- The financing covers up to 102% of the total cost of housing development.
- You do not need to own a farm to apply for the loan.
- In some cases the The Department of Agriculture (USDA) may waive the down payment on the home.
4. HUD Funding
The Department of Housing and Urban Development (HUD)for its acronym in English, offers a wide variety of government aidson-in-law to buy a house in the USA for the first time.
Many of its programs are focused on extending a helping hand to the most disadvantaged citizens of the country (those who unfortunately cannot meet their housing needs with ease).
Requirements to apply for this aid:
- Home purchase vouchers through HUD They are only extensive for people who are going to acquire their first property.
- It is mandatory to complete the housing counseling program sponsored by the Department of Housing and Urban Development.
- There are important factors to be eligible for these US government loans. The most relevant are: the amount of money you will give as a down payment, your ability to obtain a mortgage credit and your credit score.
- Through HUD you could buy a house at a lower cost and with lower interest (as long as its previous owners have not met their FHA mortgage payments).
- The Good Neighbor program helps you buy a home in a revitalized area.
- You can get a discount of up to 50% of the sale price on homes located in designated areas.
Buy your dream home in the United States
Becoming the new owner of a home in the United States can be a very complex mission, but it is certainly not impossible.
Especially if you receive government aid to comprare house in the USA, like the ones we just shared with you.
There are many programs and grants with which you could save thousands of dollars when purchasing a home in this country.
Some eliminate down payment or closing costs, while others lower interest rates or make payment schemes more flexible.
There are also aids that are especially beneficial for Hispanics. Especially if your credit score is low or need to improve it.
If you have decided to buy your first home in this North American country, and you do not meet the conventional requirements to take this step, the best thing to do is to contact a real estate expert.
Your job will consist of exposing your current conditions so that this professional identifies a program or financing that will help you successfully buy a house on American soil.
Continue reading: 6 Strategies to start investing in real estate