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Single Family
First Home
The First Home Mortgage has a fixed-rate with a 30-year term. There is no prepayment penalty. Interest rates under the NIFA program will change from time to time. Interest rates are generally less than non-NIFA mortgage rates. A First Home Mortgage may not be used to refinance an existing loan, other than refinancing a construction period loan or similar temporary initial financing with a term of 24 months or less.
NIFA partners with a network of mortgage lenders throughout the state to carry out the Single Family program. You must use a participating lender in order to obtain a NIFA loan. You can search for a participating lender in your area or view a list of all NIFA participating lenders.
Homeowner Eligibility
Applicants must be first-time homebuyers unless buying a home in a NIFA Targeted Area. A first-time homebuyer is a person who has not held an ownership interest in his or her principal residence within the last three years. In order to evidence that a homebuyer has not owned a residence during the prior three years, applicants must provide signed copies of their federal income tax returns for the three years prior to closing. All NIFA mortgages must be first-time homebuyers.
There are three exceptions to the first-time homebuyer requirement. If you lost your home due to legal action (divorce), natural disaster or required job relocation, subject to NIFA program limits, you may still be eligible for a NIFA mortgage. Additionally, owning a mobile home will not necessarily disqualify you from NIFA programs. If the mobile home was not permanently anchored to the real property and the road gear and other components were not removed, you may still qualify for NIFA funds.
The total gross annual income from all sources of all persons 18 years or older expected to live in the home must be less than the established NIFA Income Limits. (Certain of the federal insurance or guarantee programs used by NIFA may prescribe lower income limits.)
Insured
Qualifying NIFA loans must be insured by one of the following sources:- Federal Housing Administration (FHA)
- Department of Veterans Affairs (VA)
- Rural Development acting through the US Department of Agriculture (USDA-RD)
- Private mortgage insurance (for conventional loans)
Other Considerations
You must plan on living in the residence you purchase as your principal residence, and during the term of the NIFA mortgage you may not rent the residence to others. If you cease to occupy the residence as your principal residence for a continuous period of one year or more, the interest on your mortgage loan may not be deductible for Federal Income Tax purposes. You must have good credit and be able to afford the monthly payments of loan principal plus interest, taxes, hazard insurance, and if applicable, condominium fees, PUD fees and mortgage insurance.
You must have enough savings for the required down payment and closing costs. Though the total of these costs varies, on the average the down payment will amount to approximately three to five percent of the purchase price of the home. Included in the closing costs relating to a First Home Mortgage are discount points and origination fees equal to 1 3/4% of the pinciple amount of your mortgage. For NIFA loans that do not include such points and fees, see the First Home Plus mortgage program. Some loan products require minimal down payment. In some circumstances, some down payment and closing costs might be included in the loan amount or in a second mortgage loan. See details of the Homebuyer Assistance Mortgage (HBA). Contact a NIFA participating lender for a complete disclosure of costs.
Eligible Residences
To qualify for a NIFA loan, the purchase price of the home must not exceed the established Purchase Price Limits.
NIFA’s program is available for the purchase of single-family homes, qualified condominium units and two-to-four family dwellings where one unit is occupied by the mortgagor. If the residence has two or more units, it must have been constructed and initially occupied as a residence for at least five years before the mortgage is executed. No more than 15% of the total area of the home can be used in a trade or business. The home cannot be used as a rental or recreational property during the term of the NIFA mortgage loan.
Loan Assumption
NIFA mortgage loans are generally assumable. The servicing lender must process and approve the assumption. The same eligibility requirements apply to the person(s) assuming the loan. If the home is not located in a targeted area, the person(s) assuming the loan must be a first-time homebuyer (i.e. cannot have owned their principal residence during the previous three years). Loan assumptions require that the purchaser of the home meet credit qualifications. Additionally, the gross monthly income of the person(s) assuming the loan (all occupants) cannot exceed the applicable NIFA income limits at the time of the assumption. The purchase price of the home cannot exceed the applicable NIFA purchase price limits at the time of the assumption.
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