Forget rates and prices: What's really stopping you from buying a house?

Thinking about buying a house? You're probably worried about high prices and interest rates. But what if FOX 5 real estate expert John Adams told you those aren't the biggest obstacles you'll face?

Everybody knows housing prices are through the roof, and mortgage interest rates are totally unaffordable, but Adams says these are not the top two challenges.

Instead, the biggest hurdle for most first-time buyers is securing a loan with a minimal down payment and qualifying despite a low credit score.

Key considerations for first-time homebuyers:

• Credit Score and Qualification: A higher credit score typically opens doors to better loan terms. However, even with a lower credit score, options like FHA loans are available, though they may come with higher interest rates and mortgage insurance premiums.
• The Down Payment Myth: While traditional loans often require a 20% down payment, various programs allow for significantly lower down payments, making homeownership more accessible.

Let’s look at some opportunities available today:

• Down Payment Assistance Programs: Numerous programs are designed to assist first-time homebuyers with down payments and closing costs, reducing the initial financial burden. Most of these programs are limited to owner-occupants only, but not all.
• Homebuyer Education: Participating in homebuyer education courses not only equips you with valuable knowledge but is also a prerequisite for many assistance programs.

A for-sale sign in front of a home in West Islip, New York on Dec. 13, 2023. (Photo by Steve Pfost/Newsday RM via Getty Images)

Available programs and options:

1. FHA Loans: The Federal Housing Administration (FHA) offers loans requiring as little as a 3.5% down payment for borrowers with credit scores of 580 or higher. Notably, FHA loans permit down-payment assistance from relatives — a concept often referred to as the "Bank of Mom & Dad." This allows family members to gift funds, easing the financial burden on first-time buyers.

2. Georgia Dream Homeownership Program: Administered by the Georgia Department of Community Affairs, this program provides affordable financing options, down-payment assistance, and homebuyer education to eligible buyers. Key features include:

• Down Payment Assistance: Up to $10,000 in down-payment assistance, structured as a second loan with no interest or monthly payments, repayable upon refinancing or selling the home.
• Protectors, Educators or Nurses (PEN): Same as above, but up to $12,500 down-payment assistance.
• CHOICE (if a family member lives with a disability): Same as the PEN assistance program.

3. Atlanta Housing Authority Down Payment Assistance (DPA) Program: This program offers up to $20,000 in down-payment assistance to eligible first-time homebuyers, with increased assistance of up to $25,000 for public safety officials, healthcare workers, educators, military personnel, and voucher participants. Works with FHA, VA or CONV loans. Learn more at www.atlantahousing.org.  

4. Invest Atlanta Homebuyer Programs: Invest Atlanta provides several programs, such as the Atlanta Home Renovation Advantage and the Intown Mortgage Assistance Program (IMAP), offering grants and five-year forgivable loans of up to $20,000 to assist with down payments and closing costs. Minimum FICO is 660.  Other requirements apply. Go to www.InvestAtlanta.com for info.

5. BankSouth Mortgage's ReadyAssist: This suite of down payment assistance programs includes options like the Chenoa Fund (private) and Federal Home Loan Bank (FHLB of Atlanta) Programs, offering assistance of up to $17,500 for down payments and closing costs.  Up to $20,000 for first responders, educators and veterans.  They piggy-back on other programs AND offer some of their own enhancements.  Visit BankSouthMortgage.com.

In addition, some Georgia counties have set up their own programs:

6. The Welcome Home Program: Offered by GwinnettHousing, this program provides up to GHC makes the home loan affordable by holding a 1% interest second soft mortgage of up to $60,000 (depending on need). There is no payment or interest, as long as the house remains owner-occupied. The loan is repaid upon resale and is always subordinated to the first mortgage. Learn more at www.GwinnettHousing.org.

These are just a few examples of the programs you may be eligible for.

To navigate these options effectively:

1.  Assess Your Eligibility: Review the specific requirements of each program to determine your eligibility based on income, credit score, and property location.

2.  Participate in Homebuyer Education: Enroll in approved homebuyer education courses to fulfill program requirements and enhance your understanding of the homebuying process.

3.  Consult with a Mortgage Professional: Engage with a mortgage loan officer experienced in first-time homebuyer programs to receive personalized guidance tailored to your financial situation and homeownership goals.

By exploring these programs and leveraging available resources, you can move closer to achieving your dream of homeownership in the Atlanta metro area, even with a minimal down payment and a lower credit score.