First-time homebuyers may require help to break into the state’s housing market because of the rising cost of homes in Utah. Despite the difficulties with affordability, first-time buyers in Utah may qualify for a mortgage, and choices for down payment aid make it simpler to buy a home.
Utah Housing Corporation, the state’s housing authority, is one source for these programs. Many of these initiatives are geared toward first-time buyers with low-to-moderate incomes.
Best of all, you might be in line for a grant or loan to help with your down payment and closing costs.
Tips for Buying a House in Utah
It’s a good idea to have a solid concept of how much money you’ll be looking to borrow before comparing Utah mortgage rates.
Utah is a distinctive state, with several peculiar regulations and a very competitive housing market. Below, we summarize some important factors for homebuyers:
1. Property Taxes
The local real estate tax rate is extremely low. The average homeowner in Utah pays 0.59 percent of the assessed value of their home, one of the lowest rates in the country, according to the Tax Foundation.
But it’s not as easy as it seems: Rates are different depending on the school district, water improvement district, and a variety of other factors, according to a 451-page document from the Utah State Tax Commission.
To assist you in determining your potential responsibilities, request previous property tax bills from the seller.
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2. Dual Agency
When you hire a real estate agent in Utah to assist you with your home purchase, he or she can ask you to sign a form allowing them or another employee of their brokerage business to act as the seller’s representative as well.
Dual agency is what it’s called, and while some states forbid it, Utah is one of many that does.
3. Seller’s disclosure
Like most states, Utah requires house sellers to disclose any flaws that could lower the value of their property on a property condition disclosure form.
To ensure that you know things like zoning restrictions or previous leaks, thoroughly review this form. And if you have any particular inquiries, say so. In Utah, vendors must be truthful.
4. Closing Costs
A separate title policy for your lender, an appraisal charge, lender fees, and other expenditures will all be on your to-pay list, even though the seller typically bears the cost of title insurance in this case. Make sure to include them in your budget, in addition to the down payment.
5. Attorneys
A buyer in Utah is not legally mandated to retain a real estate attorney. It’s still a worthwhile addition to your budget, though.
When buying a home, getting competent legal counsel is worth the investment because the transaction is expensive, and the contracts have sophisticated terminology.
6. Climate and weather Considerations
Like everywhere else, protecting your home in Utah will cost money. Consider the unique dangers that the state presents, particularly wildfires, in addition to the normal homeowners’ insurance.
Since there are between 800 and 1,000 wildfires in the state each year, you should ensure your insurance offers enough coverage in case a natural disaster results in property damage. Avalanches may also be a risk in mountain towns.
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Can I Buy a House in Utah with no Money Down?
If the state residents are not searching for grants for first time home buyers in Utah, they are probably looking for out if they can buy a house with no down payment.
It might appear quite hard to go through with such, but you might not need any down payment at all if you qualify for a VA loan (sponsored by the Department of Veterans Affairs) or a USDA loan (guaranteed by the U.S. Department of Agriculture).
That is how close you can get to owning a house in Utah with no down payment.
Grants for First Time Home Buyers in Utah
Utah Housing Corporation (UHC or Utah Housing offers four mortgage programs) for first-time homeowners, some of which are also eligible to repeat buyers.
These conventional, FHA, and VA 30-year fixed-rate loans can be bundled with any of the programs, and down payment help is available on all of them. Here is an explanation of each:
1. Utah Housing FirstHome and Home Again loans
First-time purchasers with moderate incomes, qualified single parents, or veterans are the target market for the Utah Housing FirstHome Loan. To maintain affordable monthly mortgage payments, this loan frequently offers the best grants for first time home buyers in Utah.
Utah Housing offers the Home Again Loan for families with moderate incomes who have previously owned a home but do not meet the requirements for FirstHome loans. Both first-time purchasers and repeat homebuyers are eligible for this loan.
Borrowers are not required to attend homebuyer education classes to receive a FirstHome Loan or a Home Again Loan.
Borrower Requirements:
- Minimum credit score: 660
- Maximum debt-to-income (DTI) ratio is determined by the needs of an FHA or VA loan; if a co-signer is used, the co-DTI signer’s ratio cannot be higher than 45 percent.
- Must adhere to Utah Housing income restrictions
Property Specifications
- For House Again Loan, the property must be an owner-occupied single-family home, mobile home, condominium, or planned unit development (PUD) that has received FHA approval.
- For a FirstHome Loan, the lot size must be one acre or fewer (or five acres or less if in a rural region); there are no acreage restrictions for a Home Again Loan.
- They must meet FirstHome Loan purchase price restrictions; Home Again Loan purchase price restrictions are not required.
3. Utah Housing Score Loan
Utah Housing’s Score Loan makes it possible for first-time and repeats buyers with bad credit histories and low or moderate incomes to become homeowners.
To qualify for this sort of loan, repeat buyers must not be the owners of any other properties at the time of closing.
Borrower Specifications
- Minimum credit score: 620
- Maximum DTI ratio of 45%
- Must pass the homebuyer education course. Must fulfill the income requirements for Utah Housing
Property Prerequisites
- It must be a single-family residence that the owner occupies.
- Must meet Utah Housing purchase price limits
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Alternative Grants for First Time Home Buyers in Utah
First-time homebuyers may find it easier to purchase a home with the conditions and rates offered by government loan programs like FHA, VA, and USDA mortgages.
You can get assistance from your mortgage lender to navigate various specialized home loan and assistance choices.
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Utah Down Payment Assistance
Beyond UHC’s down payment assistance programs, Utah has more to offer in the way of grants for first time home buyers in Utah. For qualified first-time buyers, the following are some excellent options to consider:
1. Utah Home Grants
Get up to $15,000 in down payment aid, depending on your county and city, with no repayment requirements as long as you reside in your new home for a predetermined period of time.
The majority of the counties in Utah offer these grants for first time home buyers in Utah, families, individuals, military personnel, and single mothers.
2. Utah’s Community Development Corporation
(CDCU) – The CDCU offers deferred loans for down payment assistance, which are forgiven after five years of living there as your principal residence and have no interest or required monthly payments. Numerous distinctive CDCU programs are offered.
SLC: With a $332,500 maximum purchase price, SLC Plus enables qualified borrowers to receive up to $14,000 in down payment assistance. Based on financial necessity, the precise amount of assistance is decided.
Community Heroes: – Depending on the area’s median income, all deserving “Community Heroes” are eligible to receive 3% to 5% of the price of their property (up to $14,000).
Public employees and emergency responders, such as police officers, firefighters, teachers in public schools, EMTs, medical professionals, members of the armed forces, and others, have access to this.
Although this program provides deferred payments with no interest, it is not a loan that can be forgiven.
Salt Lake County: For properties acquired for less than $350,000, buyers coming into Salt Lake County (apart from Taylorsville, Salt Lake City, and West Valley City) may be eligible for up to $10,000 in down payment help.
Taylorsville City: With the same $350,000 purchase price cap, new residents to Taylorsville City are similarly qualified for up to $10,000 based on individual needs.
3. The HomeChoice
The HomeChoice program was established with assistance from the state of Utah and provides a significant grant for homeowners with disabilities.
With an extraordinarily low-interest rate of just 1%, eligible Utah citizens and their families may be eligible to earn up to $45,000 for their down payment and closing fees.
Frequently Asked Questions
The Home Purchase Plus Program provides “0% interest with deferred payments” loans for down payments of up to $10000. The loan is fully due and payable when it is no longer being used as a primary residence. The applicant must contribute $1000 in their own money toward the closing costs or down payment.
You will be regarded as a true first-time buyer if you are a single person who has never owned a home before anywhere in the globe.
A credit score of 620 is required for conventional loans. 3.5% down payment and a credit score of 640 are requirements for FHA loans. VA loans need a credit score of 620.
Conclusion
We have detailed all you need to know regarding Utah’s first-time home buyer grants.
There is no reason not to look for the help you require to ultimately purchase the home of your dreams when there are so many resources available.
References
- Utah first-time homebuyer assistance programs – www.bankrate.com
- Utah First Time Home Buyers Program GUIDE – wasatchmovingco.com