Author Topic: Down Payment Assistance Programs - Atlanta, GA  (Read 2262 times)

FrugalFisherman10

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Down Payment Assistance Programs - Atlanta, GA
« on: February 02, 2015, 03:15:47 PM »
I live in the great state of Georgia and am interested in buying a home, eventually. Not really sure when, because it takes so long to save up for a down payment. I recently realized there's all these programs for assistance with your down payment, especially for first-time home buyers... sometimes these even come in the form of a grant. A "grant" sounds like free money to me, but understandably there are going to be considerable restrictions.

I'm new to discovering these, so I haven't gotten a lot of research in yet, but I would like information/opinions from you guys as the intelligent and un-biased community that you are. I found this website downpaymentresource.com which seems pretty awesome. My main concern with reaching out to real people and resources is that they will be giving me one-sided and beneficial-to-them information (i.e., "yeah of course it's a great time to buy even with what little cash you have! Here, for a small fee let me get you set up with this xxxx-type of loan-pre-approval/home search analysis etc.")

Questions:
At what point in your financial life did you say "OK, I think I should go get pre-approved for a loan to buy a house"?
Slightly different question: At what point in my financial life would you recommend saying "OK, I think I should go get pre-approved for a loan to buy a house?"
How should the timing of the "loan shopping" correspond with the time frame you actually buy a house?
Can a down payment assistance type program be mustachian?
Can someone just explain from a candid point-of-view what all this down payment assistance and HUD stuff is about (or point me to a good resource I can read it myself)?

More info: I am 24 with a good paying and secure job right in the city. I'd like to spend around $150k, but that could vary widely in the end. (There are super cheap places to live within short distances from work, but they are either a rough area or really poor condition houses. On the other end of things, $200k might be a better price range to be in to help mitigate getting something real crappy, unforeseen problems,etc. )

Last note: Yes this topic is spurred on by a sweet property I found that makes my heart throb with wild home-ownership, grass cutting, garden tending, floor sweeping domestication day-dream fantasies. Which I at once snapped myself out of and said I need to get serious about learning some more stuff here.

Thanks for any input and guidance!

ShoulderThingThatGoesUp

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Re: Down Payment Assistance Programs - Atlanta, GA
« Reply #1 on: February 03, 2015, 09:49:07 AM »
Most of these have income restrictions, which are pretty low for a single person. You say you have a good-paying job; check the income restrictions before getting too excited.

I generally oppose these programs politically because I feel it's unlikely somebody who can't save up a reasonable down payment is in a good position to make the payments. I'm sure there are exceptions and you might be one, but consider whether it's right for you financially and morally to use limited public assistance resources right now.

mtn

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Re: Down Payment Assistance Programs - Atlanta, GA
« Reply #2 on: February 03, 2015, 10:30:05 AM »

I generally oppose these programs politically because I feel it's unlikely somebody who can't save up a reasonable down payment is in a good position to make the payments. I'm sure there are exceptions and you might be one, but consider whether it's right for you financially and morally to use limited public assistance resources right now.

Take the morals out of it. Politically right or wrong, the programs are there, and if OP would qualify it is leaving free money on the table. I'd rather have the money go to a responsible homeowner than someone who is going to put it back in foreclosure. Morally speaking, you can take this argument down a rabbit hole that (no public assistance for anything!) that isn't the point of this conversation; if the OP qualifies, they should have no moral qualms about taking the money.

FrugalFisherman10

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Re: Down Payment Assistance Programs - Atlanta, GA
« Reply #3 on: February 04, 2015, 01:40:26 PM »
I have checked the income limits for the potential programs I could utilize and I am under them. They are set a little higher than one might expect. Since posting this I've done more research.

I think our perception of these "types" of programs is that they are aimed at poor people who shouldn't become homeowners anyway. When in reality, judging by the income numbers and the house price numbers, they are aimed more at the middle class, and more people should be utilizing the incentives they offer!

As mtn mentioned(or seemed to be saying), if I'm within the bounds of income and all the restrictions, then I'm not taking money somebody else is due. In fact I'm specifically who the program is designed to target. In most cases, the programs are trying to create more homeowners demographically because it helps improve and sustain an area's neighborhoods. Oftentimes there is a restriction that the residence must be your primary residence, i.e. these are not for investors trying to make a quick buck off a property.

Thanks for your input so far, and if any one wants to answer the following questions I'd still be interested:
At what point in your financial life did you say "OK, I think I should go get pre-approved for a loan to buy a house"?
Slightly different question: At what point in my financial life would you recommend saying "OK, I think I should go get pre-approved for a loan to buy a house?"
How should the timing of the "loan shopping" correspond with the time frame you actually buy a house?
Can a down payment assistance type program be mustachian?

Cinder

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Re: Down Payment Assistance Programs - Atlanta, GA
« Reply #4 on: February 04, 2015, 02:20:37 PM »

At what point in your financial life did you say "OK, I think I should go get pre-approved for a loan to buy a house"?
Slightly different question: At what point in my financial life would you recommend saying "OK, I think I should go get pre-approved for a loan to buy a house?"

I'll add some good references here. 
http://jlcollinsnh.com/2013/05/29/why-your-house-is-a-terrible-investment/
http://jlcollinsnh.com/2012/02/23/rent-v-owning-your-home-opportunity-cost-and-running-some-numbers/

Really, the time is whenever it is right for you, you can afford not only the mortgage payment, but also the extra taxes/maintenance as well as understanding that a house does tie up a large chunk of your wealth in a single, fairly illiquid asset. 

Lots of people here will recommend either getting a (2-4)-plex and living in part of it while renting out the rest, or a fixer upper which you live in, fix up, and either sell for a profit or turn into a rental where you buy another fixer upper to live in. 

FrugalFisherman10

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Re: Down Payment Assistance Programs - Atlanta, GA
« Reply #5 on: February 17, 2015, 08:03:17 AM »
Cinder, thanks for those links. I've read both of them and they are some of my favorite posts by jlcollins, and ones that I often recommend to others.
I will say, I've recently used one of the "rent-vs-own" calculators online (at Trulia's website), and it weighs so much towards staying in the current rental situation I have. Additionally, in looking at the variables used in that model, it seems like it would be pretty accurate and comprehensive. Still, even though it is pretty clear I should continue to rent, I want to start thinking about this stuff well in advance, so that I can learn as much as I can and become really confident in the whole home-buying process. Also, I am in a somewhat unique situation as I'm realizing I have a somewhat ridiculous amount of close-enough friends that I could very reasonably see renting from me. I wouldn't want to bank on that, but it's definitely a consideration for the future if and when I buy, and if and when I have an extra room or two available. Getting a duplex in one of the developing parts of town seems to be like a really great idea too.

Staying put for now, and probably next year.