10 home loan programs that improve access to homeownership
A lot has changed since we began offering FHA loans in the 1960s. Government-backed home loan programs are still around; however, there’s a wider range of innovative solutions to get you into a home and keep you there than ever before. These programs are tailored to meet your specific needs, whether you’re looking to buy a home sooner with no down payment, ease into your full mortgage payment with a temporary buydown or use your home equity as collateral. In this blog post, we’ll explore strategies that make home financing more accessible.
1. What are the benefits of a home renovation mortgage?
Down payment assistance programs are available to offer assistance with down payment and closing costs to purchase a home. Assistance is provided in the form of a loan or grant—secured as a lien against the property—and is often forgiven over time. Eligibility is most commonly based on income.
We’re proud to offer over 700 down payment assistance home loan programs nationally, including these two unique down payment assistance programs offered exclusively by Guild.
- 1% Down Payment Advantage
With 1% Down Payment Advantage, you can start your homebuying journey with a 1 percent down payment and 2 percent1 Guild down payment assistance to start building equity—on us. In addition, we’ll pay 1 percent of your interest rate for one year with our Payment Advantage2 lender-paid temporary buydown–this will help you keep your options open when choosing the home that fits your needs and make your first-year mortgage payment more affordable. Qualified borrowers can also take advantage of our Payment Protection program to refinance with no lender fees if rates drop. For Payment Protection program full terms and conditions, visit www.guildmortgage.com/homebuyer-protection/.
- 3-2-1 Home Plus powered by The Home Depot®
If you’re a first-time homebuyer with a low-to-moderate income, 3-2-1 Home Plus provides down payment flexibility to get you into a home now. You bring a 3 percent down payment, and we give you a $2,000 eGift Card to The Home Depot®3 plus $500 to $1,500 toward closing.4
2. Ease into your full mortgage payment with a temporary rate buydown
A lower interest rate with a temporary buydown can mean a more affordable initial monthly mortgage payment while you get settled in your new home. Home loan programs with temporary buydown options have a temporarily reduced interest rate, no balloon payments at the end of your loan term and potentially lower closing costs. In addition, the structure of the buydown will determine your payment increases, making them predictable throughout the life of your loan.
If you’ve elected for a 1-year temporary buydown, the interest rate for the first year would be 1 percent lower than -your mortgage rate. The exact cost will depend on several factors, including the size of the loan, the current interest rate and the length of the buydown period.
Guild offers the following temporary buydown options.
- A 1-year buydown brings your rate down for the first year. Also known as a 1-0 buydown because your interest rate is reduced by 1 percent for the first year of your mortgage and then returns to the original rate.
- A 2-year buydown brings your rate down for the first two years. This is known as a 2-1 buydown, which reduces your interest rate by 2 percent for the first year and 1 percent for the second year. In year three, the interest rate returns to the original rate for the remaining mortgage term. We also have a 1-1 buydown, which reduces your interest rate by 1 percent for the first two years and by year three it’s back to the note rate.
- A 3-year buydown brings your rate down for the first three years. Referred to as a 3-2-1 buydown, it reduces your interest rate by 3 percent for the first year, 2 percent for the second year and 1 percent for the third year. In year four, the interest rate returns to the original rate for the remaining mortgage term.
3. Buy a home sooner with zero down
For many first-time homebuyers, saving for a down payment can take years. Our Zero Down mortgage program is an option to buy a home sooner. With flexible credit and income requirements, this home loan program makes homeownership more accessible for first-time and repeat homebuyers.
The Zero Down mortgage program pairs a standard FHA first mortgage for up to 96.5 percent of the total purchase price plus second mortgage options for your down payment and/or closing costs. The second mortgage provides down payment assistance of 3.5 to 5 percent of the purchase price as a repayable lien.
4. Move into a home at a lower price point with the help of a manufactured home loan program
If you’re ready to purchase your first home or move up, manufactured homes and CrossModsTM can offer savings over conventional site-built homes without compromising quality. Customize your new home to suit your style preferences just like you would in a traditional single-family home with driveways, carports, detached garages and porches. Instead of waiting to buy, you can enjoy newer features and amenities in your brand-new home at a lower price.
Offered in conjunction with Fannie Mae, the FNMA MH Advantage® and the FHLMC CHOICEHome programs provides you with a high-quality, flexible mortgage option that can deliver significant cost savings when compared with financing for traditional manufactured homes. Manufactured homes that qualify for the program can include custom amenities, such as attached garages, upgraded kitchens and bathrooms, energy-efficient appliances and architectural features.
5. Borrow against the equity in your home without having to refinance your first mortgage
Did you know you can access your home’s equity without selling your home? Home equity options are types of financing that allow you to borrow against the equity you’ve built in your home. With the money you receive, you have the flexibility to tackle home renovations, consolidate debts, invest in education or meet other financial goals that are important to you.
- Home equity line of credit (HELOC6)
A HELOC is a line of credit secured by your home. You can use your revolving credit line to tap into the equity you’ve built up in your home for large purchases such as tuition, renovations and emergency expenses. Since HELOCs rely on your home’s equity, you can’t borrow more than the value of equity in your home, which is the appraised value of your property minus the remaining balance on your mortgage.
- Home equity loan (HELOAN5)
A HELOAN provides up to 90 percent of your home’s equity as a second mortgage. The HELOAN is an additional loan you take out on top of your existing mortgage, which results in two separate loan payments.
6. Purchase a fixer-upper and remodel it all in one loan
Are you considering a fixer-upper? A home renovation loan is a type of home loan program specifically for funding home improvement projects, like remodeling your kitchen, replacing old plumbing or electrical systems, installing a new roof or upgrading your home’s energy efficiency.
7. Bundle costs of energy-efficient upgrades to your home into your mortgage
These energy-efficient mortgage programs create an opportunity for you to bundle the usual upfront costs of certain energy-efficient upgrades or solar panels into your mortgage so that you can spread these costs over the life of your loan.
Energy-efficient upgrades can help you reduce utility costs, which helps lower your monthly expenses, making your home more affordable in the long run. Plus, an energy-efficient mortgage can give you more choices when choosing a home. These home loan programs provide an opportunity to buy an older home, make it more comfortable and increase the value by making a few energy-efficient upgrades.
8. Get a lower interest rate for the life of your loan with discount points
Discount points are a form of pre-paid interest that you can purchase to lower the interest rate on your home loan—the more points you pay, the lower the interest rate. You can typically pay anywhere from zero to three or four points, with each point equal to one percent of your loan amount. While discount points can potentially save you money in the long run by lowering your interest rate, they require an upfront payment that affects your initial costs.
9. Apply for a government-backed mortgage if you have less-than-perfect credit
These popular home loan programs encourage homeownership by providing accessible mortgage options to borrowers who might otherwise face challenges securing a Conventional home loan.
- FHA loans: With flexible requirements, FHA loans are designed to be more accessible for borrowers with lower minimum down payments and credit scores.
- USDA loans: If you’re looking to buy in a rural or suburban area, you may enjoy benefits such as zero down payment requirements and better-than-average interest rates, helping to reduce your long-term borrowing costs.
- VA loans: These loans support veterans and active-duty service members, have zero down payment options and allow eligible applicants to qualify with a limited credit history.
The benefit of a home renovation loan is that you can buy or refinance a home and make improvements with just one loan and one monthly mortgage payment. By consolidating the costs to purchase or refinance with your estimated remodeling costs, you’ll pay for renovations over the life of your loan instead of all at once.
10. Qualify for a home without a Social Security number
An ITIN7, or Individual Taxpayer Identification Number, is a nine-digit number used for tax purposes. The Internal Revenue Service (IRS) issues it to people who need a U.S. taxpayer identification number but can’t get a Social Security number (SSN).
Having an ITIN allows you to report rental income, property taxes and other expenses related to your home on your tax return. We understand that not everyone is eligible for a Social Security number. That’s why we give non-traditional borrowers with ITINs the opportunity to qualify for the ITIN Mortgage Program with us. ITIN mortgages are home loans designed to make homeownership a reality for borrowers with an ITIN versus an SSN.
Want to learn more? Let’s talk.
If you’re unsure if you’re financially ready to buy a home, connect with an experienced loan officer to learn more about different home loan programs and down payment requirements based on your budget. From pre-qualifying to closing, our loan officers are here to guide you through your homebuying journey. Fill out the short form on this page to get started today.
1 Guild Mortgage to cover 2% of the required minimum down payment amount in the form of a nonrepayable grant with a maximum grant amount of $5,000. Changes to the loan parameters, including but not limited to the loan amount, owner-occupancy status, loan to value and other factors may render the borrower ineligible for the program. Eligibility is subject to the program guidelines. The grant may only be used for the borrower’s cash investment in accordance with the program guidelines. Must lock rate on or after 6/12/2023. Not available with any other discounts or promotions. Offer cannot be retroactively applied to previously closed loans or loans that have a locked rate.
2 The Payment Advantage program is a promotional primary purchase offer on a Conventional 1-year lender-paid temporary buydown on locks from 11/10/2022 to 6/28/2024. The promotional offer will temporarily reduce the rate by one percent for the first year of the Conventional mortgage on conforming and high balance loan limits. The lender-paid credit will fund the buydown escrow account, and the funds will be dispersed out of the buydown escrow account during the first 12 months of the loan.
3 In the state of NV, the consumer receives a $2,000 lender credit in lieu of a gift card. Payment subject to maximum allowable lender credit and minimum contribution requirements. Some loans require a minimum cash investment by the borrower, which may limit the amount of any lender credit or payment by Guild under the offer.
4 Freddie Mac BorrowSmartSM down payment/closing cost assistance amounts of $1,500, $1,000 or $500 based on Area Median Income and other eligibility criteria. $1,000 assistance applies to manufactured homes.
5 Borrower must meet program eligibility and qualify based on the note rate of the program selected.
6 HELOCs and HELOANs are brokered loan products. State restrictions and eligibility requirements will apply based on investor guidelines.
7 To qualify for the ITIN Mortgage Program, applicants must have Individual Tax Identification Numbers (ITINs) and reside in the United States.
The above information is for educational purposes only. All information, loan programs and interest rates are subject to change without notice. All loans subject to underwriter approval. Terms and conditions apply. Always consult an accountant or tax advisor for full eligibility requirements on tax deduction.