Getting into your first home can be very expensive. But there are some programs available to buyers to ease that burden. FHA is currently the lowest downpayment available to purchase a home. It must be your primary residence (not an investment property) to qualify for this loan. The downpayment for this loan is currently 3% of the purchase price, but after January 1st, 2009, it will be going up slightly to 3.5% of the purchase price.

BUT THERE IS SOME GOOD NEWS TO GO WITH THAT! If your annual household income is below $71,000, you can qualify for a special FHA program that only requires 1% downpayment! And as with most other loan programs, the Seller is able to pay up to 3% of the purchase price toward your closing costs. This means that if you qualify, you could buy a home with as little as 1% out of pocket!

There are loan limits that apply with FHA loans. Until December 31st, 2008, you can get an FHA loan in Maricopa or Pinal county up to $346,250. But beginning January 1st, 2009, that limit will be decreased to $271,000.

SPECIAL HUD/FHA PROGRAMS FOR TEACHERS, FIREFIGHTERS, AND EMERGENCY MEDICAL TECHNICIANS: You can purchase a single family HUD foreclosure home located in a revitalization area, you can get a discount of 50% off the listed price of the home! These homes are only available for bid the first 5 days that they are on the market, and if there is more than one person to bid on a home, they will be awarded by random lottery drawing. There are certain program requirements that the Buyer must agree to, such as you must agree to live in the home for 36 months after purchasing it. If you think you might qualify for this program, ask me for more details!

If you want to go with a conventional loan, the downpayment may vary anywhere from 5%-20% down, based on your credit scores, as well as other factors. The rates tend to be similar to FHA rates, but they are tiered based upon your credit score as well. The advantage to using conventional financing is that the conforming loan limits are higher than FHA, so you can purchase more home. The loan limit for a single family home in Maricopa and Pinal counties is $417,000. Above that, you would need to use “jumbo loan” financing, which will usually result in sub-prime rates, even if you have excellent credit history.