Programs help first-time buyer

Q: As someone who has never owned a home, are there any programs designed to help first-time home buyers purchase a home? If I buy a home with another person who is not a first-time home buyer, am I still eligible for any of these programs? -- Brandi S., Las Vegas

A: Thank you for your question. As there are so many changes taking place in this aspect of the lending industry, this couldn't be timelier.

In order to get you the best possible information, I solicited a response from Jeremy Daugherty, a branch manager with a major lender here in Southern Nevada. Here is what Jeremy had to say:

"I really feel that one of the most common misconceptions out there in the housing world is that with all of the lending changes we have had, that there is no way for someone to purchase a home as a first-time home buyer.

What people don't understand is that actually there has never been a better time. There are programs out there that are specifically designed for several different scenarios.

Best of all, with interest rates down, these are 30-year fixed mortgages.

One of the most common loans that we have been writing lately is back to FHA (Federal Housing Administration loans). This program is one that allows someone who may have had minimal housing experience, little down payment, or past credit problems to be able to buy. This loan is a favorite of mine for sure.

I can think back several years ago when I wrote my first FHA mortgage. The borrower had gone through a divorce and had really taken a beating on her credit. Her credit score was down and she had totally lost her dreams of owning a home. She felt that she would be stuck in an apartment forever.

After taking the time to do lending the old-fashioned way, I approved her simply by digging into specifics of her negative credit problem. Within one month, she was moving into her very own home and was able to move her mother in with her so that she could take care of her.

FHA is great in many other ways. The 3 percent down payment typically required can come from several sources. Some examples are a gift from a family member or employer or a borrower's 401K plan account that they have saved up for such a purpose.

Often people are confused as to exactly what constitutes a first-time home buyer. FHA uses the exact definition of: "an individual who has had no ownership in a principal residence during the three-year period, ending on the date of purchase (closing date) of the property and may include:

Any individual that has only owned a principal residence with a former spouse while married.

An individual who has only owned a principal residence not permanently affixed to a permanent foundation.

A property that was not in compliance with state, local or model building codes and cannot be brought into compliance for less than the cost of constructing a permanent structure."

The question above asks, "If I buy a home with another person who is not a first-time home buyer, am I still eligible for any of these programs?"

The answer is absolutely yes. FHA guidelines state that only one of the loan applicants has to qualify for first-time home buyer status in order for the mortgage to be considered as a mortgage to a first-time home buyer. However, that loan applicant must also occupy the property.

There are many other loan programs that have special parameters for first-time home buyers. Some examples are Nevada Housing Loans and House America loans, which require no money down.

Each and every borrower has their own unique situation. That is where lenders just have to get back to doing business the old-fashioned way. Get the clients to take time and sit down in front of them and listen to their ultimate dream.

I think Jeremy is absolutely correct. As usual, I'd also suggest taking the time to do your homework and sitting down with the lender you choose to fully explain your situation.

You should create a partnership with your lender and Realtor in which all of you are working together to reach your goal.

Devin Reiss is the president of the Greater Las Vegas Association of Realtors and has worked in the real estate market for more than a decade. GLVAR has more than 17,000 members. To ask Reiss a question, e-mail him at ask@glvar.org. For more information, visit lasvegasrealtor.com.