Home buying can be a confusing process. Especially if you are a first-time homebuyer in Louisiana. After all, there are just a lot of steps, tasks, and criteria. You don’t want to make a costly error. However, first-time homebuyers get help from several benefits. They are designed to attract newcomers to the real estate market. Keep reading ahead to know further.
1- First-Time Homebuyer In Louisiana
A first-time homebuyer in Louisiana is someone who is trying to purchase their first home in the state. You don’t have to be a first-time buyer to take advantage of Louisiana’s first-time homebuyer programs. The US Department of Housing and Urban Development offers federally backed loans, tax breaks, and state programs.
If you have not owned a house in the last three years, consider yourself a first-time homeowner.
2- Estimate Your Budget as a first-time homebuyer in Louisiana
Calculating how much you can afford to pay each month is half the battle. The other half is determining how much you can pay in advance. Once you’re a homeowner, estimate all these things.
In Louisiana, there is no minimum income requirement for becoming a homebuyer. You must earn enough money to cover the mortgage payment on the new home. Lenders use the debt-to-income ratio to estimate what they can afford to spend on a mortgage payment each month. The debt-to-income uses monthly gross income and liabilities for its calculation.
The median home price in Louisiana is between $189,000 to $200,000. To buy a home in that price bracket, you’d need to earn $35,000 to $40,000 per year. Plan accordingly.
3- Credit Requirements
There is a range of options available for buyers with different credit histories. Having a credit score of 650 to 700 is usually ideal. A down payment of 20% is preferable. Even though these numbers are preferable, they are not the only options.
A good lender will have options available for bad credit, fair credit, and excellent credit scores. Pre-approval is vital. It allows you to work with your lender to determine the possibilities available. It depends on your credit, income, and down payment.
i- Credit Score for the First-Time Homebuyer in Louisiana
In Louisiana, most lenders will require you to have a credit score of at least 580. Low credit scores often call for bigger down payments. To qualify as a first-time buyer, you must finish a homebuyer education course. The minimum credit score needed is 640. The loan maximum is $453,100.
4- Explore Your Mortgage Options as first-time homebuyer in Louisiana
Each buyer has his preferences when selecting a mortgage option. Some will prefer fixed monthly payments. While some will opt for adjustable mortgage rates. There are different loan options to browse.
The state of Louisiana offers housing programs for first-time homebuyers through Louisiana Housing Corporation (LHC).
5- LHC Mortgage Revenue Bond Program
Louisiana Housing Corporation’s Mortgage Revenue Bond programs assist first-time homebuyers. It offers two programs:
i- Mortgage Revenue Bond Home:
Provides five to nine percent grant with no interest or repayment demands. The minimum credit score required is 640. You need to do a homebuyer education course to be eligible. Income must be less than 80% of the local median income in Louisiana.
ii- Mortgage Revenue Bond Assisted:
Provides a four percent grant with no interest. It is forgivable after three years. The minimum credit score required is 640. You need to do a homebuyer education course to be eligible. Income can range from 115 percent to 140 percent of the average median income.
6- LHC Market Rate GNMA Program
Market rate GNMA offers FHA, VA, and USDA loans to first and repeat homebuyers in Louisiana. The loans have a 30-year fixed rate and provide 4% down payment assistance. The minimum credit score should be 640. The salary of the person can be up to 115% of the AMI. However, you have to repay the grant at a higher interest rate on your primary mortgage.
7- LHC Market Rate Conventional Program
LHC’s Market Rate Conventional Program provides competitive 30-year fixed-rate and low mortgage insurance. It is available to both first and repeat homebuyers. Income must be within the 80 percent AMI. The loan can be combined with up to 4% down payment assistance.
To qualify as a first-time buyer, you must finish a homebuyer education course. The minimum credit score needed for all buyers is 640, with a loan cap of $453,100. One can only purchase a single-family primary residence.
8- Delta 100 Program
The Delta 100 Initiative is a parish-based program. It helps first-time home purchasers in Louisiana’s delta parishes. The Delta 100 offers 100 per cent financing and up to 3% closing cost assistance. Delta program requires no specific credit score for suitability. The program is only available for single-family home purchases. The house can’t cost over $242,000, and your salary can’t exceed 80% of the AMI. To qualify, you will have to contribute either 1% of the purchase price or pay $1,500 from your finances.
The home must be in one of the following parishes:
- East Carroll
- Pointe Coupee
- West Carroll
- Ouachita (excluding Monroe)
Regentology Can Help If You’re a First-Time Buyer In Louisiana
Buying a home can be confusing. Especially if you’re a first-time buyer. Housing prices, area, realtors, home loans- it can get pretty stressful. Regentology is here to take the burden off for you. We have a team of professionals that will connect you with the right real estate agent in Louisiana. They will sort everything from buying to getting loans approved for you. Simply fill out the form to get a free consultation!