Home Loan Programs and Tips For Low-Income Oakland County MI Buyers

Home Loan Programs and Tips For Low-Income Oakland County MI Buyers

Home Loan Programs and Tips For Low-Income Oakland County MI Buyers

Owning your own home is the American dream and being in a lower income bracket doesn’t automatically disqualify you from buying a home. Fortunately, there are a number of low-income home loans available to help you reach your goal of homeownership.

Depending on other important factors such as your credit score, debt, location, and profession, you may be able to qualify for a home loan through one of the following programs: FHA loans, USDA loans, Fannie Mae HomeReady loans, Freddie Mac Home Possible® loans, Good Neighbor Next Door program, and VA loans. 

Before we take a closer look at the eligibility requirements of these different loan programs, here are a few tips for buying a home with low income:

The first thing you’ll want to do is review your credit reports from all three major credit reporting agencies (Equifax, Experian, and Transunion)  and dispute any errors you may find. Make a concerted effort to pay all of your accounts on time and lower your credit usage to below 30% of your available limit. This can help improve your credit score before applying for a mortgage.

You should also try to pay down your outstanding debt (especially credit card balances) which will help lower your debt-to-income (DTI) ratio. Next, you’ll want to get a mortgage pre-approval. When house hunting, sellers are likely to take you seriously if you’ve already been pre-approved when you put in a purchase offer. A pre-approval tells you how much a lender might be willing to lend you, based on a review of your overall financial picture.

After you get a mortgage pre-approval, the next step is to enlist the services of a qualified Oakland County MI real estate agent. Find an agent who is knowledgeable about the local housing market as well as the different home buying programs that are available for low-income borrowers.

Once you’ve found an agent you can work with, start looking at home buying assistance programs. Check with the Michigan State Housing Development Authority (MSHDA) for available homebuying assistance programs, including grants or loans to help cover your down payment or closing costs.

Low-income home loan programs

FHA loans

FHA home loans are loans backed by the Federal Housing Administration (FHA).  An FHA loan can be a good option for first-time homebuyers who may not qualify for a conventional loan or for those who may be struggling to save a 20% down payment. With an FHA loan, a borrower can have a credit rating as low as 500 and a fairly high debt-to-income ratio.

These loans require only a 3.5% down payment, which can come from gifts, and have less stringent requirements for credit rating or income. FHA loans require all borrowers to pay upfront and annual mortgage insurance premiums, no matter their credit score or down payment amount. Borrowers putting the minimum 3.5% down will pay FHA mortgage insurance for the life of the loan.

Eligibility requirements for FHA loans:

  • A 500 to 579 credit score and a minimum 10% down payment
  • A 580 credit score and a minimum 3.5% down payment
  • Meet local county FHA loan limits. Oakland County, MI FHA loan limits range from $331,760 for 1 living-unit home to $638,100 for 4 living-units.  

USDA loans

The U.S. Department of Agriculture also ensures low-income home loans provided by approved lenders up to 90% of the loan amount. USDA loans cater to homebuyers with a modest income. With a USDA loan, no down payment is required, no assets needed to qualify, and no maximum loan amount. 

Eligibility requirements for USDA loans:

  • Preferred 640 credit score
  • Meet local income eligibility requirements. For a family of 1-4 in Michigan, the average household income limit for a USDA loan is around $86,850, and for a family of 5 or more, it can be as high as $143,300.
  • Purchase a home in a designated rural area

Fannie Mae HomeReady® loans

The HomeReady mortgage program from Fannie Mae offers low-income home loans to homebuyers with limited cash for a down payment. Underwriting guidelines are more flexible to make it easier to qualify and both first-time homebuyers and repeat buyers are eligible. If all borrowers on the loan are first-time buyers, at least one borrower must meet the homeownership education requirement, by completing an online course on the Framework website.

Eligibility requirements for Fannie Mae HomeReady® loans:

  • Minimum 620 credit score
  • Minimum 3% down payment
  • Earn a maximum of 80% of the area median income (AMI)

Freddie Mac Home Possible® loans

The Freddie Mac Home Possible® mortgage program also caters to very low-to low-income borrowers with limited down payment funds. Both first-time and repeat homebuyers may qualify. Co-borrowers who do not live in the home can be included for a borrower’s one-unit residence, and borrowers are permitted to have another financed property –  all with competitive pricing and the ease of a conventional mortgage. 1-4 units, condos and planned-unit developments, and manufactured homes are eligible with certain restrictions.  

Eligibility requirements for Freddie Mac Home Possible® loans:

  • Minimum 660 credit score
  • Minimum 3% down payment
  • An income less than or equal to 80% of the Area Median Income (AMI)

HUD’s Good Neighbor Next Door program

With the Good Neighbor Next Door program from the U.S. Department of Housing and Urban Development (HUD), law enforcement officers, teachers (pre-Kindergarten through 12th grade) firefighters, and emergency medical technicians can contribute to community revitalization while becoming homeowners. HUD offers a discount of 50% from the list price of the home.

In return, an eligible buyer must commit to live in the property for 36 months as his/her principal residence. If an FHA loan is used to buy the home under this program, the minimum required down payment is $100. You can also use a conventional or VA loan.

Eligibility requirements for HUD’s Good Neighbor Next Door program: 

  • Work full-time as a pre-K through 12th-grade educator, emergency medical technician, firefighter, or law enforcement officer
  • Buy a home in a HUD-designated revitalization area
  • Must live in the home for at least 36 months (3 years)

VA loans

The U.S. Department of Veterans Affairs (VA) offers a mortgage program to help veterans, service members, and surviving spouses purchase homes. The VA is not a direct mortgage lender, but it does guarantee a portion of the loan so borrowers can receive more favorable loan terms like a lower interest rate. 

If your VA-backed home loan goes into foreclosure, the guaranty allows the lender to recover some or all of their losses. Since there’s less risk for the lender, they’re more likely to give you the loan under better terms.  90% of all VA-backed home loans are made without a down payment. 

There is no minimum required down payment or mortgage insurance requirement. These loans also limit the amount you can be charged for closing costs. There are no VA loan limits  

Eligibility requirements for VA loans:

  • Valid Certificate of Eligibility
  • Preferred minimum 620 credit score
  • Required VA funding fee to offset program costs to taxpayers

Partner with highly-rated Oakland County MI REALTOR® – Tom Gilliam   

Award-winning Oakland County MI REALTOR® – Tom Gilliam provides the kind of knowledge, skills, dedication, and professionalism you need when buying or selling a home. 

With over 20 years of real estate experience, Tom will protect your interests, advocate for you, negotiate on your behalf, and be your trusted guide and advisor every step of the way. Tom works very hard for his clients and will always go the extra mile to ensure a smooth transaction and the best results possible!

If you or someone you know is interested in buying or selling real estate in Oakland County MI, please give Tom Gilliam a call today at (248) 790-5594 or you can get in touch here.

Tom Gilliam, REALTOR®
RE/MAX Classic
29630 Orchard Lake Rd.
Farmington Hills 48334
Direct: 248-790-5594
Office: 248-737-6800
Email: Tom @ Homes2MoveYou.com
License #314578 

First-time Homebuyers: Can I Still Buy a House in Oakland County MI During Covid-19?

First-time Homebuyers: Can I Still Buy a House in Oakland County MI During Covid-19?

First-time Homebuyers: Can I Still Buy a House in Oakland County MI During Covid-19? – If you are a first-time homebuyer and were in the market to buy a home in Oakland County prior to the COVID-19 crisis, the situation has more than likely affected your original gameplan.

It’s one thing to have never bought a house before and be in unfamiliar territory. Throw in a pandemic and the situation is now moved into deeper uncharted waters, even for the most seasoned buyer.

The COVID-19 situation has derailed millions of folk’s financial plans including buying property. But it doesn’t have to be that way. 

If you were still hoping to purchase a home soon, you probably have a lot of questions like whether it’s even possible to buy a home now or tour a house, or how the pandemic has impacted home prices, and more.

The good news is that many people are still buying houses during this unprecedented time, even though things are a bit different than they were before the coronavirus changed the home buying/selling landscape.

As a first-time homebuyer during the coronavirus, here are a few things to know:  

Can You Still Buy a House Now? 

The answer is yes. Although buying a house today may be more challenging due to health and economic concerns, it is definitely possible. The U.S. Department of Homeland Security has declared that residential and commercial real estate services are an essential service.

Search the MLS for Oakland County MI Homes for Sale

If you find a home that seems right for you, have job stability and can get financing at historically low rates, buying property might be a wise choice and the right thing to do – even now.   

You Can Still Shop for a House

You can still shop for a house, but the rules for viewing a property are going to different than before COVID-19. Buyers, sellers, REALTORS, and brokers are coming up with different ways to see and show homes.

Some areas, however, have put a pause order on in-person showings all together. There are also some sellers that might be fine with you touring their house, while others might not be comfortable letting strangers in their home, even if property tours are allowed in your area.

Aside from federal and local restrictions, a lot will depend on the home sellers’ comfort levels. You can also work with an agent and have a virtual showing, where the agent walks through the property with you on Zoom, FaceTime, or some other video conferencing format.

A local real estate agent will know what buyers can and can’t do in your area, so its best to consult an agent for the most accurate, up-to-date information.  

You May Need To Get Your Pre-approval Updated

While the process of getting preapproved for a loan hasn’t changed, as most buyers today do an online preapproval application, the preapproval itself has changed post-coronavirus.

Mortgage lenders are battling economic uncertainty by raising minimum credit scores, requiring higher down payments, triple-checking employment status, and even eliminating certain loan types altogether. 

As some lenders increase their standards (overlays), your price range might change because your approved loan amount is lower, or you may no longer qualify for a loan at all.   

You May or May Not be able to Get an Inspection

Once the house goes under contract, closing is different in today’s world. You’ll still be able to get an appraisal under current regulations, but depending on whether real estate is considered essential in your area, you may not be able to get an inspection.  

If you are able to get an inspection, most likely you and your agent will not be able to attend.  A number of home inspectors are now using live video chatting apps like FaceTime or Zoom to let home buyers tag along remotely. This keeps buyers at a safe distance for home inspections. 

More Buyers Are Doing eClosings

Digital real estate closings or eClosings, give buyers and sellers the ability to sign settlement documents electronically—meaning parties don’t have to meet in a room to close the deal.

Most eClosings are orchestrated by title agents, who often lead individuals through the required paperwork by video conferencing. Most states are now offering electronic notarizations. This map from settlement software company PropLogix shows what states allow digital closings. 

Partner with Top-rated Oakland County MI REALTOR® – Tom Gilliam

 2020 Best of Farmington Hills REALTOR - Tom GilliamWhether you are looking for homes for sale in Oakland County MI or you are ready to list your current property, experience matters most in a changing market.

With over 25 years of local experience, Tom provides the kind of knowledge, skills, dedication, and personalized service you need and deserve.

As your personal agent, Tom will protect your interests, advocate for you, and go above and beyond to ensure a smooth and successful transaction.

If you or someone you know is interested in buying or selling Oakland County MI real estate, please give Tom a call today at 248-790-5594 or you can get in touch here.

Tom Gilliam, REALTOR®
RE/MAX Classic
29630 Orchard Lake Rd.
Farmington Hills 48334
Call: 248-790-5594
Office: 248-737-6800
Email: Tom @ Homes2MoveYou.com
License #301741

Home Buying With No Excuses

Home Buying With No Excuses

Home Buying-Bust Through

If you—or someone you know—is still on the fence about home buying today, don’t wait. We’ve heard lots of excuses in recent years. Not enough down payment? Credit score too low? Can’t qualify with a foreclosure (short sale, bankruptcy) history? Too much debt (especially, student debt)? Rates too high? Loans too expensive? Don’t know where to start?                    Home buying

All of these worries can be—and are—overcome with time and determination.

Don’t be walled in by old assumptions when it come to home buying. In this market with low rates and little down payment you owe it to yourself (or share this info with friends/family members) to discover exactly how to own a home.

With Oakland County seeing the lowest inventories in some time (as low as 4-6 months) it is time to be ready when your dream home finally hits the market. Home buying is process and once you start the process things will fall into place. 

It isn’t difficult. All you need to do is take the first step to contact a local real estate pro—like us—or a mortgage lender (we can refer you to several top-notch options). The only thing holding you back is making that first contact. Keep reading. You may be surprised to learn the real truth behind the myths that stop many from homebuying in our local real estate market.

I don’t have any money for a down payment. Even if you don’t have a chunk of change lying around, you might have family—or friends—who are willing to give you money for a down payment. Get gift letters stating that the cash is a gift and doesn’t need to be repaid and your down payment problem is solved. Or, ask a relative to invest in the property as a co-owner. Your relative puts up the down payment. You make the monthly payments. You both split any profits at sale.

My credit score isn’t good enough. You don’t need a super-high credit score to buy a home. In October 2014, the average FICO score for all types of closed/settled loans was 726. For FHA loans that figure stood at 683.

Interest rates are too high. Historically speaking, interest rates on mortgages are still very low. The bad news is, rates will eventually rise and that could put homeownership out of reach—if you continue to wait to buy a home.

I have savings, but I still don’t have 20% to put down on a house. You don’t need a huge down payment to buy a home today. Sure, 20% is a great down payment, but you can still get a loan with 5% down for conventional loans and 3.5% down for FHA loans. Some new loan programs allow as little as 3% down again. Let us show you the new math.

I have too much student loan debt (or other debt). If your debt is manageable and you’re making monthly payments to lower it, you aren’t automatically disqualified from getting a home loan. Speak with a lender to determine how your income and debts compare and if there’s room in your budget for a mortgage payment.

Loans are too expensive. Lenders charge fees to originate and process your loan and fees vary. They are required by law, before you agree to a loan, to provide a Good Faith Estimate (GFE) of all their charges. Different loan programs have different costs, so compare loans—and lenders—to find out which fits your budget best.

I can’t afford to apply for a loan. Most lenders do not charge for “running the numbers” to determine if you can qualify for a mortgage. During pre-qualification, lenders use general figures you provide to present a rough estimate of how much home you can afford. Pre-approval, in which lenders determine exactly how much home you can afford based on specific information—such as tax documents, paystubs and bank information you provide. Pre-approval is also often provided with no obligation by many lenders. Take the first step. Find out what you qualify to buy—it won’t cost you much more than time.

I don’t know where to start. As your local real estate professionals, we make it our business to answer your home buying questions, help you determine if you are able to buy a home…and then find the right home for you. Contact us at any time. We would love to discuss your situation and find out if we can make you a happy homeowner!

Free Homebuyers Guide

Buyers Agent In Oakland County, Michigan-Realtor Tom Gilliam


Buyers Agent in Oakland County, Michigan Questions and Answers

A  Buyers Agent in Oakland County, Michigan is a Professional Realtor's that focus on either first time home buyers or home buyers that are in the market to purchase a new home and need to a have buyers agent Buyers Agent In Oakland County, Michigan-Realtor Tom Gilliamrepresentation in their purchase of a new home in Oakland County, Michigan. The main job for a buyers agent in Oakland County, Michigan is not only to send listings to  potential home buyers and take them out to look at homes, there is much more to it to be a great buyers agent in Oakland County, Michigan. One of my first commandments to my home buyers is to listen to their needs and wants and to determine if they are being realistic between the two. My second commandment is to make sure they are pre-qualified to purchase a home within the price range they can afford. (Get Pre-Qualified Here). Once this has been completed then it's time to go out and enjoy watching your clients look at homes and begin their new future in Oakland County, Michigan. Once the home buyer finds the home that they love, you then have the job of negotiating an offer as their buyers agent in Oakland County, Michigan and get them the best price possible

What are some tips every home buyer should know to get started in their home purchase in Oakland County, Michigan?

If you think it’s about time you bought a home instead of renting, a little homework and help from a buyers agent in Oakland County, Michigan before you start looking will increase your odds of finding the best buy for you. Here’s how:

  • Dig up your down payment

Know where your down payment cash will come from. If it’s coming from stocks, go ahead and sell them. If Aunt Jessie is loaning the money, get it in hand so you are ready to go.

  • Nail down your financing

It’s tough to home shop if you don’t know what you can afford. Together with a reputable lender, we can help you determine how much home you can afford and which loan program will maximize your buying power. By getting pre-approved for a loan, you’ll be a better prospect in the seller’s eyes.

  • Take your time

Don’t jump at the first home you see. Let us introduce you to different areas and home types to see what suits your needs the best.

  • Do your homework

Once you’ve found the home you want, ask us to run a competitive market analysis of other homes that have recently sold, so you’ll be able to make a sensible offer to purchase.

  • Enjoy!

With expert assistance and a positive attitude, home shopping can be fun and rewarding.

What would you recommend as the best first step in home buying?

Before you start looking at homes for sale, be sure you do some “homework.” Here are some of the questions for which you’ll need answers:

  • Check out interest rates

What are current local mortgage interest rates for 15-year and 30-year fixed rate mortgages, and for 1- 3- and 5-year adjustable rate mortgages?

  • Shop for the best loan

Which type of loan is best for you? Will you be in the house several years and benefit most from a long-term fixed rate, or do you want a lower, short-term rate because you plan to move soon or expect your income to increase rapidly over the next few years?

  • Determine how much house you can afford

How much of a mortgage can you qualify for? The loan amount plus your down payment tells you how much house you can afford.

  • Investigate neighborhood prices

What neighborhoods feature homes in your price range?

  • Separate needs from wants

What are your priorities for your next home? How important are public transportation, community facilities, on-street parking, lot size, privacy? How many bedrooms and baths will you need? Will you need a space for a home office? How important are quality neighborhood schools?

What is the single most important rule in house hunting?

Want to know what the number one rule is when home shopping? Well, many details must be considered in choosing your next home – style, size, price, location. It’s probably impossible to say which factor is most important. But one thing is certain – if you will be moving again in a few years, be sure you buy with selling in mind. Chances are, the items that make your new home a comfortable fit for you will also attract buyers later on. As your buyers agent Oakland County, Michigan there are some special considerations to keep in mind.

Some special considerations for the short-term homeowner who has resale in mind:

  • Watch for growth potential

Look for an established neighborhood that will be enhanced by future growth but not inconvenienced by it.

  • Look out for resale value

Seek a prime neighborhood where houses sell well in any market.

  • Check out location

Consider availability of all aspects of transportation; even those you may not use.

  • Schools are important

Check for quality public schools, whether or not you have school-age children.

  • Green is good

Look carefully at the lot for trees and greenery to buffer winter winds or summer heat.

  • Make room for visitors

See if ample guest parking is available for you and your neighbors.

  • Privacy is a plus

Consider how much privacy the house and lot provide.

  • Drive the commute before you buy

Check morning and afternoon drive time to work, schools, shopping, churches, etc.


Are there any inside tips on down payments for first-time buyers?

Folks who are new to the home-shopping world need more than just good luck. You should, of course, save all you can for closing costs and a down payment. For further help:

  • Revisit your “wish list”

Reconsider what you’re looking for in a first home. Find out what you can afford now, and consider buying a starter home that requires a small down payment with the idea of moving up in a few years.

  • Take advantage of special programs

Look into special low- and no-down payment programs like loans guaranteed by the Department of Veterans Affairs (VA) and Federal Housing Administration (FHA). Some areas also have local programs for low- and moderate-income families or first-time buyers, offering lower interest rates or down payments.

  • Gather gifts

Check with parents and relatives for monetary gifts that can go toward a down payment or closing costs. A 20% down payment can dramatically cut monthly costs and eliminate monthly mortgage insurance premiums.

  • Consider “sweat equity”

If you can fix up a home that’s in poor condition, you increase the value of your investment faster. Ask us about special combination loans that provide fix-up funds as well as purchase money.

  • Scour market for bargains

What are some questions I should ask a prospective buyers agent?

So, you’re thinking about buying a new home! The first place to start is by looking for a Buyers agent in Oakland County, Michigan to help you. An experienced buyers agent will “bind” together the entire process. The right pro will help you find the right property and keep things on track from shopping to closing.

Here are some key questions to ask the buyers agent you are interviewing:

  1. Do you represent the buyer or the seller?
  2. What are your fees and who pays them?
  3. How much time will you have to help me look for a new home? What tasks will you perform for me as my representative?
  4. How often will you communicate with me, and how can I reach you?
  5. Will you refer me to some buyers you have represented recently?
  6. Do you have access to the area multiple listing service, foreclosed listings and other sources of information about available houses?
  7. Will you show me all the available houses in my price range, even if they are listed by another company?
  8. Will you give me a comparative price analysis for any homes I am considering?
  9. Do you represent the buyer or the seller?
  10. What are your fees and who pays them?
  11. How much time will you have to help me look for a new home? What tasks will you perform for me as my representative?
  12. How often will you communicate with me, and how can I reach you?
  13. Will you refer me to some buyers you have represented recently?
  14. Do you have access to the area multiple listing service, foreclosed listings and other sources of information about available houses?
  15. Will you show me all the available houses in my price range, even if they are listed by another company?
  16. Will you give me a comparative price analysis for any homes I am considering?

As your Buyers Agent in Oakland County, Michigan I'm here to guide you through the process and open to your questions. Call Tom Gilliam today! 248-790-5594


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