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First time homebuyer incentives & questions?

I am in the process of looking for a home, as a first time homebuyer in Pace, Florida. I will be utilizing the USDA 100% rural loan. We are looking at new and "used" homes in the $125K-$175K range.

My first question is, What first time home buyer incentives are available? Or does it depend on the lender?

Second, What can I expect to pay out of pocket with the 100% rural development loan (closing costs, inspections, etc)?

Any other advice would be appreciated.
  • March 04 2012 - Pace
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Answers (6)

Wetdawgs. You are the only one that finds this information "dated." Even though the post is old the information supplied by knowledgeable professionals is beneficial to the current buying community.
  • March 16 2014
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I sure hope the original poster has made a lot of progress in the two years since posting.
  • March 16 2014
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The best financial answers will come from a mortgage broker. Before you begin the search connect with a mortgage broker rather than a bank. Brokers work with a variety if lenders and the best ones know the mortgage products that are available. They can walk you through the entire process before you even begin the property search. However before you can lock into mortgage the property must meet the requirements of the specific loan as well as the lender. Good luck!
  • March 16 2014
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Are you working with a REALTOR?  They should be able to answer a lot of these questions for you.  If not, please consider working with me.  As far as grants to help with closing costs assistance, I would have to check into that.  There are two programs for Escambia county that assist with down payment but on a USDA rural development loan, you would have no down payment.  One program is specific to Escambia County, the other I would have to verify if it could be used in Santa Rosa County. As far as inspections go you will want a full home inspection that covers 4 point inspection and wind mitigation.  This will cost you about $350.  You will also have to pay for your appraisal out of pocket.  That runs about $400.  Some lenders require a termite or WDO (wood destroying organism) inspection and some don't.  I would recommend you have one regardless and that costs about $150.  You may also need a survey.  If the previous owners have a survey and nothing has been added to the property (fencing, out building, etc) then you can use that survey.  If you need a new one it's about $350-400 if you are in a typical neighborhood.  If you are out in the country with some "undefined" acreage it could run a bit more.  If there is a septic tank you will want to consider that as well, too.  Your closing costs will include doc stamps on the note and intangible tax on the mortgage. The rest of your closing costs will really depend on your lender as a lot of them are loan origination fees,underwriting fees, and other fees associated with the lender and the loan itself.  You can ask your lender for a Good Faith Estimate that should give you a break down of what you can expect to pay at closing.  Generally speaking, it would be around $5,000 on a $150,000 loan to include all of the above mentioned items.  
  • March 16 2014
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Thank you for the info, that's great.

As far as first time buyer incentives, I was looking at what kind of grants or something like it that may be available. My wife and I are in law enforcement and teaching, and I have heard that some things may be available based on our profession (police car in neighborhood type thing).

As far as closing costs, what could I expect? I mean, is it a percentage or set amount?

What type of insections SHOULD I get? And, what is reasonable for those inspections?
  • March 04 2012
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There is no more first time home buyer tax credit if that is the kind of incentive you are looking for. If you are using an RD loan for financing you really don't have much need for other funds.  You can get closing costs paid for in one of three ways. 1) You can negotiate with the seller to pay closing costs.  2)  You can actually get a lender credit to pay closing costs (that involves taking a higher than market interest rate and the lender using premium pricing to pay closing costs)  or  3) Rural Housing is one of those rare loan products that actually allows you to finance the closing costs.  The property must appraise for at minimum the purchase price + financed closing costs.


As far as out of pocket costs you'll have to pay for any inspections you chose to have for the property (i.e. home inspection, mold/radon, structural not that all these inspections are needed or required).  Talk with your realtor to get an idea of what your market charges for these costs

  • March 04 2012
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