Mortgage Blog

College Grads Could Get Home Buying Help

Several states are offering homeownership assistance programs to recent college grads that may help them receive thousands of dollars toward the purchase of a home. In New York, Gov. Andrew Cuomo recently announced the "Graduate to Homeownership" program, which provides assistance to first-time buyers who have graduated in the past two years from an accredited college or university with an associate's, bachelor's, master's, or doctorate degree. Program participants may be eligible for up to $15,000 in down-payment assistance or a reduced-rate mortgage—but they have to agree to live in one of eight upstate New York communities in order to be eligible.


"Upstate colleges and universities have world-class programs that produce highly skilled graduates, who then leave for opportunities elsewhere," Cuomo said in a statement. "This program will incentivize recent graduates to put down roots."

Nearly half of states offer some form of housing assistance to student-loan borrowers, according to an analysis by Credible.com. Ohio offers Grants for Grads, which, like the New York program, offers down-payment assistance or lower-rate mortgages to people who have graduated from college in the past four years. Rhode Island's Ocean State Grad Grant program offers up to $7,000 in down-payment assistance to college graduates who earned a degree in the past three years.

Many of these state programs, however, require college grads to live in certain cities within the state, similar to New York's program. "It can certainly help people who are dealing with high student debt burdens," says David Reiss, research director for the Center for Urban Business Entrepreneurship at Brooklyn Law School. "But programs like this have to deal with a fundamental issue: Do these communities have enough jobs for recent college graduates? Time will tell."

Source: “College Grads Can Get Home Grants – But There’s a Catch,” realtor.com® (May 5, 2017)

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Posted by Jill Kohler on May 9th, 2017 2:24 PM

401k for home purchase
Many people consider this option since they don't have money set aside in their savings account. By withdrawing money from your 401k you will have to pay early withdraw fees as well as taxes on the money you take out. On the other hand, it may be worth it if you found the right house.

As a first time homebuyer you can often avoid the penalties, but you will have to pay taxes on the money. However, you can usually take the money out of your 401k without a penalty if you basically take out a loan on the money,( if your employer permits loans.)

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Also, unless you are putting at least 20% down on the home purchase, you will more than likely have pmi insurance. Since there isn’t going to be a huge difference in the monthly payment on the insurance itself, it may be in your better interest to consider not borrowing from the 401k unless you have enough to put the entire 20% down to avoid the insurance all together.

If you have an accountant I would suggest you sit down with them and see what this impact would have on each situation in relation to your taxes.  It is unique to every individual.

Posted by Jill Kohler on October 13th, 2016 11:05 AM
This is one of the most common questions we hear from potential home buyers and borrowers. The simple answer is a minimum of 3.5 to 5% in cash of the amount of the property you're planning on purchasing. This assumes decent credit (above 620 mid score) 2 years continuous employment, documented income (current paystubs, w-2's) with the total payment (including property/school taxes and insurance) or PITI no more than about 31% of gross monthly income for monthly housing expense. Bear in mind this is a minimum set of criteria. We fund loans through many different wholesale banks and each of those lenders has their own set of underwriting guidelines (and some can be downright picky) If you are planning on applying for a purchase mortgage anytime soon, you may want to speak with a qualified mortgage professional to review your credit, financials, accounts and ratio's to prepare in advance before entering the market and falling in love with your dream home. 

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Posted by Jill Kohler on October 11th, 2016 11:17 AM

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