North Carolina programs help boost the Triangle’s first-time homebuyer market

For first-time homebuyers, affordability remains a top concern when looking for a home. Yet with programs geared toward making homeownership a reality, the Triangle’s first-time homebuyer market is looking bright for potential buyers wanting to take advantage of the opportunities that exist in North Carolina.

Trent Olson, vice president and mortgage senior loan officer for TowneBank Mortgage in Raleigh said there are numerous programs specifically for buyers and that the key is talking to the right lender to help you find the programs that will work for your needs. The following are things to think about if you’re considering buying this year.

Olson said one of the first things to keep in mind for new buyers is that a first-time buyer doesn’t have to be a person who has never purchased a home previously.

“A first-time homebuyer is defined as somebody who has not lived in or owned a primary residence in the past three years,” he said. “For example, I have a client now who’s using the program. They have a rental property and they haven’t lived there, so they are considered a first-time homebuyer at that point.”

“North Carolina Housing Finance Agency (NCHFA) has two different programs — one designed for a first-time homebuyer and then another for any buyer coming in,” Olson said, explaining that the North Carolina 1^st Home Advantage Down Payment program is for first-time buyers and military veterans who meet specific requirements.

Upon qualification, Olson said buyers receive a $15,000 forgivable loan. “They don’t pay back the loan while they live in the house. It does not accrue interest while they live in the house. But if they refinance the loan within the first seven years, or if they sell the home within the first ten years, they have to pay back the $15,000,” he said.

He added that the qualifications for this loan are straightforward for most buyers.

“For that program, you have to be a first-time homebuyer and you have to make the household income limit — meaning, not just who’s on the mortgage,” he said. “So, if a spouse is the only one on the mortgage because they can qualify that way, the other spouse’s income still counts toward the income limit. If there are two people, the incomes are less, and if you have three people or more, that’s when you have the highest limits for the program.”

Olson also said that the income levels are based on the county where the home is located. “There’s an income limit for each county, so they have to be first-time homebuyers and make less than the county limit.” The income limits will be highest in Wake County and smallest in counties where home prices are lower.

In addition, the NCHFA’s Community Partners Loan Pool provides down payment assistance for up to 25% of a home’s sales price, not to exceed $50,000, for buyers making less than $140,000 per year or for rural buyers who meet an income threshold.

One of the important things Olson said buyers need to remember is to find a local lender who is connected to these specific programs.

“Some of the teams that I work with have lenders that are not here. They’re telling all their first-time homebuyers, ‘You’ve got to come up with this much down payment and then go ask the sellers to cover your closing costs.’ They don’t really need to do that if they’re talking with a local lender in North Carolina,” he said. “They really need to find somebody who is familiar with it, so that they can understand their options.

Lenders outside of North Carolina, for example, will likely not offer these programs as part of their mortgage services. A lender like TowneBank Mortgage can offer guidance for qualifying for them.

“I have about three or four clients under contract now using that $15,000 loan. They’re getting in there free. Or, they’re getting some of their due diligence or their earnest money back at closing,” Olson added. “All kinds of great things are happening with that program. And the funds are always available. You don’t have to worry about getting on a list. You don’t have to take a class. You don’t have to do anything but make sure that you can get approved for it through the lender that’s working with that program.”

If you’re considering buying your first home, Olson said the key to understanding whether you qualify for these programs is asking yourself three questions: “Am I a first-time homebuyer? Does my income meet the standards? Is my credit score over six-forty? Those are the three biggest things that we look at.”You can also contact Olson directly to learn more about the programs available to the Triangle first-time homebuyer market.