Listen to the companion Inspire Podcast episode about homeownership.
Deciding to buy a home can be a bit like unlocking the door to a maze: The moment you enter the housing market, the twists and turns begin.
Do you earn enough to qualify for a loan? How will your credit score impact the interest rate? If a 50-year mortgage were an option, how much more would you pay over the life of the loan? It’s enough to boggle the mind of any first-time homebuyer.
“For most families, it is the biggest purchase of their life,” said Cäzilia Loibl, chair of Ohio State’s Consumer Sciences program and director of The Ohio State University Extension Housing Counseling Program, which advises Ohio residents on buying homes. “It has to be done the right way.”
“They're trying to navigate it alone, and it can be very difficult to try to figure out when, and how, am I going to be able to buy a home? Having support can be a really great thing to try to navigate that,” said Stephanie Moulton, professor and associate dean for faculty and research at the John Glenn College of Public Affairs who studies housing and urban economics.
Most homebuyers don’t realize how many resources are available to them, said Erin Higgins, residential lending section chief at the Ohio Housing Finance Agency, which oversees state programs to help first-time homebuyers. The agency coordinates with the Extension Housing Counseling Program and other nonprofits to advise residents.
“It's very emotional for people to buy a house. … Especially in the loan process, there can be a lot of things that go awry,” Higgins said.
But people don’t have to go it alone.
“There are so many things at your disposal: housing counseling (programs) to teach you how to own a home, how to be a good homeowner,” Higgins said.
Many of the following resources, especially homebuyer counseling, are available to anyone, whether you qualify for monetary assistance or not.
State housing finance agencies
Every state has an agency that helps low- and middle-income households to purchase affordable homes.
In the Buckeye State, the Ohio Housing Finance Agency provided $1.3 million in downpayment assistance in the last fiscal year — helping 6,700 families and individuals secure minimum down payments for their mortgages. Downpayment assistance can be 3% to 3.5% of the purchase price, depending on the loan type and county.
The agency partners with 150 mortgage lenders across the state to offer discounted mortgage rates and down payment assistance. Lower rates are available to veterans, military families, first responders, doctors, nurses and teachers. The agency partners with various organizations, including OSU Extension, to provide homebuyer education.
First-time homebuyers can receive a mortgage tax credit that can lower their federal taxes.
Municipal funds
Cities and counties sometimes offer incentives for purchasing a home. That’s because home ownership is a net positive for the community, Moulton said.
“Homeownership can help stabilize democracy,” she said. “It can help people contribute to the public good of maintaining the community.”
Cities including Columbus and Cincinnati provide up to $5,000 in forgivable loans for downpayments to lower- to middle-income first-time homebuyers through a continuation of the American Dream Downpayment Initiative. Child care providers and teachers get additional benefits in some cities.
Assistance for veterans, servicemembers
Veterans Administration Home Loans are private-lender loans that are partially guaranteed by the government. The loans require no downpayment, no private mortgage insurance, have lower interest rates and limited closing costs.
Tinker with online tools
Fannie Mae offers handy, online resources for homebuyers. The government-backed organization makes home loans more affordable by buying mortgages from lenders.
The Down Payment Assistance Tool is a fillable form that helps people interested in buying a house learn which agencies or groups might provide downpayment assistance.
You don’t need to apply for a Fannie Mae mortgage to take HomeView, a free, online course that helps potential homebuyers explore whether they are ready to buy, plan for a down payment and understand the loan process. The course takes three to four hours to complete, but you can stop and start again later.
State Extension’s one-on-one counseling
Many state universities offer homebuyer education courses and one-on-one counseling.
Ohio State Extension’s monthly homebuyer workshops are synchronous, online classes approved by the U.S. Department of Housing and Urban Development.
The Online Homebuyer Education Program offers a 4-hour, online course that teaches how to ask questions, make decisions and advocate for yourself during the homebuying process. Those completing the course can request to meet privately with a HUD-certified counselor. Cost for course/counseling is $75.
“As we walk with people through the journey of buying a home, (we) really dive into their budget,” said Melissa Rupp, assistant professor of family consumer sciences, and certified HUD-housing counselor. “They fill out their budget sheet; we talk about it.”
“We're looking at home ownership, which is a really big goal,” she said. “But it takes all the micro steps to get there. It has to be very intentional.”
A nationwide network of HUD housing counseling agencies offers similar services outside of Ohio.
