The real estate market in Georgia is not as bad as it is in other markets, yet even so, there seems to be more houses available than there are buyers. Such a buyer’s market often leads to first time home buyers being able to find houses they can afford earlier in life than they expected to. About the only difficulty first time home buyers will run into in Georgia is coming up with enough cash to make a down payment of 6 to 10%, plus have enough left over for closing costs.
Fortunately, there is a good supply of first time home buyer programs designed to help with down payment or closing cost assistance, or low-cost/low interest mortgages. These programs differ from one to the next in terms of what they provide, what will be expected of you, and so forth. Just be careful before you sign on the dotted line for any government assistance program so that you know exactly what you're getting yourself into.
Georgia Dream Home Ownership Program
The Georgia Dream Home Ownership Program is designed to provide financing for low and moderate income individuals procuring their first-ever mortgage. The 30-year, fixed-rate mortgages the state provides are only given to first time buyers unless the home being purchased is in a specific target area. The loans are written by the FHA, VA, or USDA and served through local banks or other lending institutions. There are certain requirements and restrictions associated with this program including the following:
- applicants must be willing and able to contribute at least $500 cash towards the purchase at time of close.
- approved applicants must attend a free new homeowners seminar.
- any home purchased cannot have a value that exceeds program limits.
- applicants must be able to prove income, employment, and fairly good credit.
The Georgia Dream Home Ownership Program also offers a secondary loan which can provide up to $20,000 to cover the cost of closing and down payment. This secondary loan usually carries an interest rate of 0% and has a delayed payment option. With the delayed payment there's no need to pay off this secondary loan until such time as the home is sold, transferred to another owner, refinanced, or no longer qualifies as the owner's primary residence.
County and Local Programs
Georgia first time home buyers also have several options at the county and local level. Because there are so many options it is impractical for us to discuss the details of each one here. Therefore, a list has been provided including the name of the program, the telephone number (where applicable), and any other information deemed necessary. This list was taken directly from the HUD website and is deemed to be reasonably accurate at this time.
- Atlanta Consumer Mortgage Counseling Service DAP Grant (DPAP) Max 5% - (770) 455-1770
- Charlton County Community Home Investment Program (CHIP) Down Payment and Closing Cost Assistance - (912) 496-2549
- Clarke County Housing & Economic Leadership Partners Inc Direct Homeownership Assistance Program - (706) 549-5200
- Georgia Housing Yes Inc Helping Hands Program (GIFT)
- Hall County Down Payment Assistance Program (DPAP) - (770) 297-1800
- Multi Counties United Way of Metropolitan Atlanta IDA Program (IDA) - (404) 527-3549
- Savannah Dream Maker 1 - City Wide (DM1) - (912) 651-6926
- Savannah Dream Maker 2 - Target Neighborhood (DM2) - (912) 651-6926
- Savannah Dream Maker 3 - Infill Housing Neighborhood Street and Block Revitalization Projects (DM3) - (912) 651-6926
Other Programs
A small number of other programs may be available from time to time in the state of Georgia. Sometimes you'll see nonprofit organizations offer down payment assistance programs or gifts that can be used to pay for closing costs. Be aware that financial regulations implemented in 2007 and 2008 have greatly reduced the number of nonprofit organizations involved in the housing industry. But they still do exist if you're willing to look for them.
If you live in a larger city you may also be able to find municipally owned properties which the city is attempting to sell off in order to get new owners into them. Programs such as these usually offer properties at a drastically discounted rate while also providing low interest mortgages and down payment assistance. The only catch to these programs is a requirement that often dictates the homeowner live in the house for 10 years or more. You might also be required to do a certain amount of rehab to the property to bring it up to municipal standards.
Finally, under no circumstances does the federal government issue federal grants for the purposes of housing assistance. There are some in the industry touting the availability of such federal grants, but the truth is, they just don't exist. A visit to the federal government's grant website will reveal a large-type, bold announcement on the front page stating as much. Therefore, do not ever pay for a guide or a book claiming to give you tips on how to procure federal housing grants.