Gonçalo Fernandes wanted to buy a house with a garage for his motorcycle, but it took rising home prices to drive him into the market.

“My wife and I saw home prices appreciating and we were worried we would get priced out of the market,” Fernandes says. “We got really motivated when we saw mortgage rates going up last fall. We had been looking online on Redfin and Zillow for at least six months, but after we met with a lender and a real estate agent, we made an offer within a month.”

Fernandes, 32, works in the auto industry in Herndon, Virginia, and his wife, Nicole Fernandes, 33, works in medical billing in nearby Ashburn. The couple, whose budget was around $400,000, purchased a townhouse in Leesburg, Virginia, with a two-car garage.

“Our total mortgage payment is only about $200 more than we were paying in rent,” Gonçalo Fernandes says. “We had saved enough for a 12 percent down payment, but we were a little paranoid as first-time buyers and wanted to keep as much as we could in cash reserves.”

The couple made a down payment of 5 percent with a conventional loan geared toward first-time buyers. They pay private mortgage insurance (PMI) on the loan, required on most purchases made with a down payment of less than 20 percent.

“We bought a fixer-upper and have already done some work on it and we got a good price on the house since it was on the market for a while,” Fernandes says. “We’re having it appraised in a few months because we may be able to get rid of our PMI already.”

The Fernandeses used YouTube videos to teach themselves how to do home improvement projects and painted their kitchen cabinets.

“The house was in good shape, but it was covered in a serious case of ugly,” Fernandes says. “We negotiated with the seller to pay us the value of the repairs that were needed, such as replacing the water heater, patching the roof and resealing some windows. We took that money as a credit toward closing costs so we could keep as much cash as possible to use for reserves and repairs.”

The Fernandeses were able to buy their home by saving, negotiating and accepting a home that needed a little work. Other first-time buyers have reached their goal through help from family members and home buyer assistance programs.

First-time home buyers represented 33 percent of all home purchasers in 2018, according to the National Association of Realtors, and their median age was 32.

About 25 percent of buyers received a loan or gift from a family member and 10 percent received financial assistance from a government agency or nonprofit organization, according to Freddie Mac.

With $67,000 in student loan debt and $50,000 in savings, Rija Tofeeq, a 27-year-old nurse, was torn between wanting to buy a home and paying off her loans. A co-worker told her about the Maryland SmartBuy program, which allows buyers to pay off their student loans with a zero-interest second loan when they use the Maryland Mortgage Program to purchase a home.

“I contacted a lender and learned that if we could qualify for a $275,000 loan we might also qualify to borrow 15 percent of the home value, up to a maximum of $40,000, to pay off my student loans,” Tofeeq says. “My husband and I had been living with my parents and our 7-year-old daughter and 3-year-old son to save money and to get help with our kids.”

Tofeeq’s 33-year-old husband, Sayed Shah, had been finishing his college degree when Tofeeq learned about the program and was about to get a new job.

“We did the loan entirely in my name and he held off taking a new job until the loan closed because we had to meet the income qualifications for the program,” Tofeeq says. “The program requires that you pay off all your student loans, so we paid $27,000 on my student loans and another $20,000 as a 5 percent down payment.”

The couple has now moved into a single-family home in Pasadena, Maryland. The remaining $40,000 of Tofeeq’s student loans were paid by the lender and Tofeeq has a second loan on her house to cover the repayment. As long as she stays in the home and makes payments on the loan at zero percent interest for five years, the rest of the loan will be forgiven.

Two home buyer programs in the District of Columbia supported the dream of Yaqueline “Jackie” Uribe Perez Clauss, a teacher at Wilson High School in Northwest and a single mother of a 22-year-old, a 17-year-old and a 6-year-old, to buy her first home. Clauss participated in D.C.’s Inclusionary Zoning program, which offers qualified borrowers the chance to enter a lottery to purchase an affordable home. The program has income limits as well as a requirement to take a home buyer education class.

“I was living in a basement apartment with three kids when I came to D.C. in 2016 and my goal was to buy a house,” Clauss says. “The inclusionary zoning process was very complicated, but I wasn’t going to let go of my dream even after I didn’t get the house I wanted at first.”

Clauss also qualified for $30,000 in down payment and closing-cost assistance through the District’s Home Purchase Assistance Program (HPAP), which supplemented the $2,000 she had saved on her own. She eventually won the lottery and moved into a house in the Fort Lincoln Park neighborhood in Northeast.

Maria Lynard, a 29-year-old first-time home buyer in Fredericksburg, Virginia, never stopped living at home with her parents so she could save for a down payment.

“I paid off my car, so my only expenses were my cellphone, gas, car insurance and food,” says Lynard, who works for a remodeling company. “My real estate agent recommended that I go to George Mason Mortgage for a loan and they told me about homeowner assistance programs for first-time buyers.”

Lynard discovered that her income and first-time buyer status qualified her for a $4,000 grant from the Virginia Housing Development Authority to pay for her closing costs.

“All I needed to do was take a home buyer class online and the grant doesn’t need to be repaid,” Lynard says. “I made a down payment of 8 percent on my house, which is move-in ready so I don’t need to worry about projects.”

Lynard paid about $200,000 for her first home.

While many first-time buyers get help from their parents with down payment funds, Walker Timme, a 35-year-old teacher at Basis Charter School in D.C., received an inheritance when her mother died in 2018 that allowed her to pay cash for her first home.

“It feels as if my mother is still here in some way because the money she left me is paying for my condo and she would love it,” Timme says. “My monthly expenses on the condo are just the condo fee, taxes and insurance, which add up to less than I was paying in rent for the studio I’ve lived in for the past 11 years.”

Timme had been “recreationally grazing,” wanting to buy for a year or so, but the inheritance galvanized her to seriously find a condo that met her priorities: a two-bedroom, two-bathroom home in Columbia Heights that allows dogs and is close to a Metro station. Her other must-haves included a front desk for security and a second bedroom for her father to visit her comfortably.

Every one of these buyers worked with a real estate agent but Timme also had the support of a lender to understand the financial aspects of buying. Some lenders are particularly passionate about finding assistance or special loans for first-time buyers.

“There are so many options for first-time buyers through the Maryland Mortgage Program and there are relatively high income limits in many counties,” says Ryan Paquin, branch manager and mortgage consultant with First Home Mortgage in Crofton, Maryland. He said in Prince George’s County, for example, there are programs for households with an income of $169,820 as long as there are three or more people living there.

The SmartBuy program, which helps purchasers pay off their student loan debt, is part of the Maryland Mortgage Program.

Paquin points out that first-time purchasers, for the purposes of buyer assistance programs, are people who haven’t owned a home in the past three years.

“There are grants that don’t need to be repaid and low- or zero-interest loans that sometimes don’t need to be paid until you sell or refinance,” Paquin says. “Loan programs are out there with low down payment options and debt-to-income ratios as high as 50 percent.”

A debt-to-income ratio compares the minimum monthly payments on all debt, including your mortgage payment, with your gross monthly income. Credit score requirements vary for these programs.

“Before looking for a home, buyers should have a lender pull their credit because the credit scores people get from free credit score sites or their credit card companies are different than the ones a lender sees,” says Ryan Vitielliss, assistant branch manager at First Home Mortgage.

Dana Bull, a real estate agent with Sagan Harborside Sotheby’s International Realty in Marblehead, Massachusetts, bought her first house at 22 with a down payment she had saved by working throughout her high school and college years.

“What’s most important for first-time buyers is to assemble the right team, with a lender, a real estate agent, an attorney and a home inspector to represent their interests,” Bull says. “It’s also smart to buy something with the worse-case scenario in mind and then figure out how you’ll handle it.”

Bull recommends looking for a place that appeals to renters so that the property can become an investment in the future.

“First-time buyers would be smart to buy a two-bedroom condo and rent out a bedroom to a roommate so they can afford it more easily,” Bull says. “A two-bedroom is easier to rent and it has a bigger pool of buyers in the future, too.”

Searching for just the right property and managing the financial aspect of a purchase can seem overwhelming to first-time buyers, says Alyssa Cannon, a real estate agent with McEnearney Associates in Arlington, Virginia.

“I suggest that people break down the process into bite-size steps,” Cannon says. “Meet with an agent and a lender so that you understand the steps and know your financial position. Then look at open houses so you get a better idea of what you like. Eventually, you’ll find a place where you can see yourself living for a long time.”

Cannon says it’s fine to look online to get an idea of what’s available, but she thinks seeing properties in person can educate buyers so they understand home values and can explore different neighborhoods.

“The important thing is to jump in with a lender first because buying your first place isn’t a one-size-fits-all proposition,” Paquin says. “A lender can help you come up with a plan that works for you so you can take the plunge and stop wasting money on rent.”

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