biden first time home buyer program

The Biden First-Time Homebuyer Program

Many renter households are getting frustrated by the incredibly hot housing market. It can be hard to save for a down payment and it can be frustrating knowing that you can otherwise afford a house.

Luckily, there are programs like the Biden First-Time Home Buyer Program to help ease the burden.

The Biden First-Time Home Buyer program is a down payment/closing cost assistance program that can help first-time homebuyers purchase a property. While it hasn’t been passed into law yet, it’s on its way.

Let’s look further into who qualifies for the program and how it works.

What is the Biden First-Time Home Buyer Program?

The Biden First-Time Home Buyer Program is a federal government initiative that provides financial assistance to first-time home buyers. The program is designed to help make the dream of homeownership more attainable for those who may not have the necessary funds for a down payment or closing costs.

The program offers up to $15,000 in financial assistance, which can be used towards a down payment or closing costs. In order to qualify for the program, applicants must meet certain income and credit requirements. Additionally, the property must be located in an eligible area.

Importantly, this money is given in the form of a tax credit. This is a refundable tax credit, but you will still need to have cash at hand temporarily until credited the money.

If you are a first-time homebuyer who is looking for financial assistance, the Biden First-Time Home Buyer Program can help.

But it’s not going to help you if you simply have no money in the bank. If that’s your situation, you may need a different down payment assistance program.

biden first time home buyer program

Qualifying for the Biden First-Time Home Buyer Program

In order to qualify for the Biden First-Time Home Buyer Program, applicants must meet certain income and credit requirements. Additionally, the property must be located in an eligible area.

To meet the income requirements, applicants must have a household income that does not exceed 160% of the median income for the area in which they are looking to purchase a home. For example, if the median income in your area is $50,000, your household income cannot exceed $100,000.

To meet the credit requirements, applicants must have a credit score of 640 or higher. If you do not have a credit score, you may still be eligible for the program if you can provide proof of alternative credit history.

You also need to be either a first-time homebuyer or you cannot have owned a home within the last three years. You will need to agree to occupy the property as a residence for at least four years.

If you are interested in applying for the Biden First-Time Home Buyer Program, you should know that it isn’t yet a law. The bill is up to be passed, but it hasn’t been passed yet.

Note that the requirements may also change.

This act isn’t entirely new. There’s usually at least one First Time Homebuyer Act being floated. But this would increase the credit to $15,000 from a previous $8,000.

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Alternatives to the Biden First-Time Home Buyer Program

If you are not able to qualify for the First Time Homebuyer Program, or if you need to purchase a house before the bill passes, there are other options available that can help you get your dream home.

Some of these are special loan products. But note that these loan products may only apply to specific properties and they may be difficult to get. When a loan is difficult to close, sellers generally aren’t eager to accept them.

One alternative is the Good Neighbor Next Door program, which is offered by the U.S. Department of Housing and Urban Development (HUD). The program offers discounts of 50% on the purchase price of HUD-owned homes to eligible buyers who are employed full-time by certain public service organizations.

To be eligible for the Good Neighbor Next Door program, you must:

  • Be a law enforcement officer, teacher, firefighter, or doctor
  • Work full-time for a state, local, or federal government agency
  • Have a minimum two-year employment commitment
  • Be a U.S. citizen or permanent resident
  • Meet certain income requirements

If you are interested in applying for the Good Neighbor Next Door program, you can contact your local HUD office.

Another alternative is the Veterans Affairs (VA) Loan program, which is offered by the Department of Veterans Affairs. The VA Loan program is available to eligible active-duty military members, veterans, and their spouses. The program offers loans with no down payment and no monthly mortgage insurance premiums.

To be eligible for the VA Loan program, you must:

  • Be a veteran, active-duty military member, or spouse of a military member
  • Meet the service requirements for your branch of the military
  • Have a minimum credit score of 620 (technically, the VA does not have credit score requirements, but this is usually a bank requirement).

And, of course, there’s the popular FHA Loan program, offered by the Federal Housing Administration. The program offers loans with a down payment as low as 3.5%.

To be eligible for the FHA Loan program, you must:

  • Have a minimum credit score of 580
  • Be a U.S. citizen or permanent resident
  • Meet certain income requirements
  • Meet certain property value requirements

Another option is the USDA Loan program, which is offered by the United States Department of Agriculture. The USDA Loan program is available to eligible borrowers who are looking to purchase a home in a rural area. The program offers loans with a down payment as low as 0%.

To be eligible for the USDA Loan program, you must:

  • Be a U.S. citizen or permanent resident
  • Meet certain income requirements
  • The property must be located in an eligible rural area

If you are interested in applying for the USDA Loan program, you can contact your local USDA office. Whether a property is considered rural or not depends on a lot of factors, and you can’t know without checking the maps.

Grants and Down Payment Assistance Programs

There are a number of down payment assistance programs available, but many are highly specialized. You can find out more about down payment assistance programs in your state by connecting with your local lenders. Usually, they require that you be a first-time home buyer, meet income requirements, and have a minimum credit score of 620 to 640.

  • If you are a member of the military, you may be eligible for the Military Housing Assistance Fund (MHAF) program. The MHAF program provides down payment assistance of up to $20,000 to eligible military members and their spouses.
  • If you are a teacher, you may be eligible for the Teacher Next Door program. The Teacher Next Door program provides down payment assistance of up to $6,000 to eligible teachers.
  • If you are a firefighter or police officer, you may be eligible for the Heroes Home Advantage program. The Heroes Home Advantage program provides down payment assistance of up to $5,000 to eligible firefighters and police officers.
  • If you are a healthcare worker, you may be eligible for the Healthcare Professional Next Door program. The Healthcare Professional Next Door program provides down payment assistance of up to $4,000 to eligible healthcare workers.

Down payment assistance programs are frequently based on region (such as areas that the city wants to revitalize) or occupation (such as down payment assistance programs for teachers).

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Other Options for Down Payment Assistance

Whether you want a brand new home or affordable housing, there are options for you.

Don’t forget that you can generally be gifted a down payment by family members, as long as it isn’t a loan. You will likely need a letter stating that the down payment has been given to you free and clear and that there’s no expectation of the money being paid back.

Otherwise, there are always some tax credits associated with buying a home (such as an energy-efficient home), and there’s always the mortgage interest tax deduction to reduce your overall tax burden.

Conclusion

The Biden Administration’s First-Time Home Buyer Program is a great opportunity for those who meet the eligibility requirements. But even if you don’t qualify for it, there are still ways to get your dream home. Before you make any conclusions about what you can or can’t afford, talk to a lender.

Lenders have a very wide variety of products to pull from. If you work with a mortgage lender or a mortgage broker, it’s possible that they can find you a homeownership program that will work for you.

It’s still not known whether the Biden First Time Home Buyer Program will actually pass. But if it does, it may make home-buying a little easier for a first-time buyer within this hot real estate market.

FAQs

Has the Biden First Time Home Buyer Program passed?

No, the program has not passed. It is still in the proposal stage. If it does pass, it should pass some time during 2022. So, if you’re thinking about purchasing a house late in 2022, consider this program as an option.

Does the Biden First Time Home Buyer Program Give Down Payment Assistance?

Technically, it’s a tax credit. But the tax credit can be used to cover some or all of your down payment and closing costs. If you had an $8,000 down payment and $2,000 in closing costs, you would only receive a $10,000 tax credit, not the full $15,000 amount. Likewise, if you had $20,000 in down payment and closing costs, you would still only receive $15,000.

How Much is the Biden First Time Home Buyer Program?

The maximum amount of the tax credit is $15,000. So, if you purchase a home for $300,000, you would get a tax credit of $15,000. You will need to wait until tax time to get the money back, but it’s a significant amount.

How Can I Buy a Home With No Down Payment?

There are a number of programs that can help you buy a home with no down payment. You can find out more by contacting your local lenders or any association that has to do with your occupation. You can also be gifted a down payment by family.

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