Georgia First-Time Homebuyer Guide

With home prices rising across the country, buying your first house can be both an exciting and intimidating process. As a resident of Georgia, you have access to a number of unique homebuyer programs and loan options that can make the dream of homeownership more affordable and achievable. Read on to learn more about first-time homebuyer programs available now in Georgia – and how to get started using them. 

Benefits of Being a First-Time Homebuyer in Georgia 

As a first-time buyer in Georgia, you have access to assistance options that may make buying a home easier. 

• Government-sponsored home loans: Georgia lenders offer government-sponsored home loan options for first-time buyers – like Federal Housing Administration (FHA) and United States Department of Agriculture (USDA) loans – to buy a home with more lenient income and credit requirements. 
• Down payment and closing cost assistance: The Georgia Dream Homeownership Program can help you access closing cost assistance or down payment assistance of up to $10,000. 
• Homebuyer education courses: Georgia Dream also offers a free homebuyer education course available through eHome America. This course includes a section on financial management, which can make it easier to manage ongoing mortgage payments. 

In addition to statewide resources, the city you’re moving to might also offer specialized down payment or closing cost incentives. 

Qualifications for First-Time Homebuyers in Georgia

To qualify as a first-time buyer in the state of Georgia, you must not have had ownership in a home in the past three years. However, this definition only applies if you’re looking to use one of Georgia’s first-time homebuyer loan programs to purchase the property. Like other states, there is no legal minimum income, education, or finance-based requirements you must meet before buying a house. If you are able to afford it and it is for sale, you are free to buy a home in the Peach State. 

Questions to Ask Before Buying Your First House in Georgia

Purchasing your first home can be a fun and thrilling period in your life – but it’s important to start this stage at the right point for your unique needs. Before starting the process of applying for a home loan, be sure to ask yourself the following personal questions. 

1. What are Your Personal Long-Term Goals? 

The first question to ask yourself when thinking about becoming a homebuyer is which type of housing is right for your unique needs. If you’re primarily worried about flexibility or you are not sure where you want to settle down yet, it might be beneficial to hold off on buying until you explore a few options through renting. If you are settled in an area that you like and you want to start investing in your future, buying a home can help you transition from renting to building equity. 

2. What is Your Financial Situation?

Think about your financial situation and how owning a home fits in with your income status. To own and maintain a home, you need steady and consistent income, as well as a down payment equal to at least 3% of the value of the home with most loan programs. Other expenses to consider as a homeowner include homeowner’s insurance and private mortgage insurance, which you may be required to take on depending on your financial situation and loan type.

Our mortgage calculator can help you create a reasonable monthly housing budget. Consider how your needs may change in the near future and determine if your household income is sufficient to buy a home and maintain it. 

3. What are Your Housing Needs?

Consider your current housing needs and how they might change in the future based on your goals. For example, if you have children who will be going off to college soon, you might want to consider downsizing into a smaller space when you purchase property. 

Online home sales databases can help you research and organize previous home purchase prices based on details like location, number of bedrooms, and other special features like pools and garages. Use the mortgage calculator to determine what the monthly mortgage payment on your ideal home would be and consider how you might be able to remain flexible if you’re outside of your allocated budget. 

4. What is the Real Estate Market Trend?

The housing market is constantly evolving – keeping your finger on the pulse of how home prices in your area are changing can help you decide when to buy a house. Entering the housing market when home prices are low helps you save money when you buy and build equity faster over time, as real estate prices tend to rise overall in the long-term. 

5. What are Your Mortgage Options?

Think about your mortgage options and how you will cover your down payment when purchasing a home. Some applicants might be able to buy a home with 0% down when using a government-backed home loan, removing a major financial barrier in the buying process. You should also pull your credit report and credit score to determine if your credit is sufficient to get a home loan as well – most loans require a score of at least 580 points at minimum. 

First-Time Homebuyer Statistics in Georgia

• Average Home Price in GA: $319,330
• Minimum Down Payment in GA: 0% (USDA and VA loans)

How to Apply for First-Time Homebuyer Loan Programs in Georgia

If you’re feeling intimidated by the number of options and steps associated with getting a mortgage loan, you aren’t alone. Thankfully, the truth is that the mortgage process is relatively simple after you break it down to its most basic steps. The following are some of the most common parts of the homebuying process for first-time buyers. 

1. Determine Your Budget 

The first step in the process of buying a home is to determine if you can afford a home in the first place or if you should wait a few years before buying. Add up your total household income and calculate your debt-to-income (DTI) ratio by dividing your total monthly recurring debt by your pre-tax income. If your DTI ratio is too high (more than 50%), you might want to take some time to pay down debt before investing in a home. If your debt is currently manageable, a mortgage calculator like the one linked above can give you a rough idea of a monthly budget to shop with.  

2. Get Pre-Approved for a First-Time Home Mortgage

The next step is to secure a more solid budget by getting pre-approved for a mortgage loan. Apply for a loan pre-approval online, if applicable, and wait for a loan decision. Your pre-approval letter will help you start your home search with a budget and tells sellers that you’re serious about buying a home. At this point, you can also start thinking about what you’ll need in a down payment and how you’ll finance it. 

Georgia’s statewide down payment assistance program is the Georgia Dream Homeownership Program. This wide-reaching government program offers more affordable loan solutions, down payment assistance, and help with closing costs to first-time homebuyers. Special loans for down payment assistance may also be offered to select public servants, educators, and members of the military. To qualify, you need to meet income requirements relative to the median average income in your area. You must also demonstrate financial need by holding limited investment assets. Be sure to apply early to keep your homebuying process on schedule. 

3. Hire a Real Estate Agent 

You will want to work with a real estate agent to assist you in the shopping and buying process. Start by asking family members and friends for local recommendations. You can also work with NAF’s affiliated company, NAF Homes*, which helps connect home shoppers with a trusted list of real estate agents in their area. You can also utilize state resources like the Georgia Real Estate Commission. Your agent might also be able to provide you with access to exclusive listing options before they’re available on general real estate databases.

4. Start the Search for Your Dream Home

Now you are ready to start the search for your dream home, which many consider to be the most fun part of the homebuying process. Start by thinking about your future housing needs and create a list of ideal characteristics or features your dream home would have. Some examples could be a certain number of bedrooms, accessibility, and distance to public transportation options. Your real estate agent can use this list of wants and needs to guide your property search.  

5. Make an Offer 

After identifying the right home for you, the next step involves crafting an offer. Your real estate agent will help by examining comparable home sales, determining the appropriate offer amount for the property, and formalizing the offer through a letter. While you have the option to draft your offer letter, it’s usually better to allow your agent to handle it to keep the home sale on track and ensure all necessary details are included. 

6. Conduct a Home Inspection 

The next step is to conduct a home inspection and review the results. The inspector will provide you with a comprehensive home inspection report. If the home inspection report reveals major underlying problems that will be expensive to fix, you might need to add sale contingencies that could slow down the buying process. 

7. Close the Deal and Become a Homeowner

Finally, it’s the last step – closing on your home loan and taking control of your new property. At your closing meeting (coordinated and scheduled by your NAF Loan Officer), you’ll sign off on your mortgage and have the property title transferred to your name. Be sure to bring a valid form of photo identification and your closing documents to your meeting to close efficiently and effectively. 

5 Traditional First-Time Homebuyer Programs in Georgia

Georgia residents can access special types of mortgage loans to buy their first homes. The following are some of the most common types of loans you’ll see available as you compare funding options. 

Conventional Mortgage

While not a homebuyer program specifically for first-time buyers, many first-time homeowners do use Conventional loans to purchase their properties. Conventional loans are the most common type of home loan and can be used to purchase most types of homes. To qualify, you will need a down payment of at least 3%, a DTI ratio of 43% or less, and a credit score of at least 620 points. 

FHA Loan

FHA loans are government-insured mortgages aimed at assisting homebuyers with lower credit scores and down payments. They have insurance from the Federal Housing Administration (FHA), allowing lenders like NAF to accept more accessible qualification criteria and lower upfront costs. To qualify, you will usually need a down payment of at least 3.5% and a credit score of at least 580 points. 

VA Loan

VA loans are specialized loan options for members of the armed forces and veterans who have served. A few select family members may also qualify, as well as Coast Guard applicants who have devoted a significant time to service. The biggest benefit of a United States Department of Veterans Affairs (VA) loan is the ability to purchase a property with 0% down while also avoiding mortgage insurance required on some Conventional loans. To qualify, you must provide documentation of your service and demonstrate consistent, long-term income required to sustain the loan payments. 

USDA Loan

If you’re buying a home in a sufficiently rural area as defined by the United States Department of Agriculture, a USDA loan could be a beneficial choice for you. USDA loans are government-backed mortgages designed to help families in rural and suburban areas afford homes. They offer no down payment options and competitive interest rates, promoting homeownership in eligible regions. To qualify, your home will need to meet eligibility requirements, and you cannot earn more than 115% of your local median income. 

Closing Assistance Programs

In addition to the statewide program listed above, individual Georgia cities may offer down payment assistance to new residents. For example, the Invest Atlanta program allows some new buyers in Atlanta to access up to $20,000 in additional closing cost and down payment assistance. Review your city or bureau’s local government resources to learn more about location-specific, active programs for help covering closing expenses. 

What Are the Mortgage Rates in Georgia?

In exchange for providing you with loan funding, lenders like NAF charge interest on your principal balance. This interest is expressed as a percentage of the current balance, referred to as your mortgage loan interest rate. 

Mortgage rates directly impact your monthly mortgage payments – lower rates result in reduced payments, while higher rates increase payments. These rates are influenced by factors like economic conditions, inflation, and central bank policies. Locking into a mortgage loan at an advantageous rate may potentially save you thousands of dollars by the time you pay off the loan. 

Financing Your First Home

Before buying a home, take some time to think about how homeownership fits into your plans for the future – as well as which mortgage lender you want to work with. First-time buyers have access to a range of loan options from New American Funding, as well as unique programs like NAF Cash** that give you access to flexible financing choices. Options for first-time buyers include FHA loans, VA loans, and down payment assistance issued through Georgia Dream. 

For more information about your homebuying options, connect with NAF today. Your Loan Officer will be happy to answer any questions you may have and help you find the right loan for your unique needs.

Georgia First-Time Homebuyer FAQs

Is there an income limit for first-time homebuyers in Georgia?

There are local income limits for first-time homebuyers in Georgia using a down payment assistance program or who are applying for a government-backed loan like a USDA mortgage loan. Other than these program restrictions, there is no minimum or maximum income to buy a home in Georgia. 

Can a person with low income buy a house in Georgia?

Yes, a person with low income can buy a house in Georgia. Down payment assistance programs like the Georgia Dream Homeownership Program can make homeownership more accessible for low-income individuals. There is no state minimum income required to buy a house. 

How much does a first-time buyer have to put down in Georgia?

Most types of loans require that you put down at least 3% of the purchase price of your home. Some government-backed mortgage loans allow you to finance 100% of the property, meaning that you don’t need any down payment. 

Does Georgia have first-time buyers programs?

Yes, Georgia does have first-time buyers programs managed through the Georgia Dream Homeownership Program. To qualify, you will need to be a first-time buyer as defined federally, hold no more in assets than 20% of the value of your home loan, and meet income restrictions. 

Do you have to pay back down payment assistance in Georgia?

Yes, most borrowers will need to pay back down payment assistance in Georgia. The Georgia Dream program issues down payment and closing cost assistance as 0% interest loans, which are due for repayment when you sell the home or refinance the loan. 

 

* NAF Homes, Inc. is an affiliate of New American Funding and does not originate mortgage loans or issue loan commitments.  NAF Homes, Inc. is a MI Real Estate Broker #6505431109, Tel. 844-626-1300.

NMLS #6606. www.nmlsconsumeraccess.org. Terms and Conditions Apply.  This is not a loan commitment or guarantee of any kind. Loan approval and rate are dependent upon borrower credit, collateral, financial history, and program availability at time of origination. Rates and terms are subject to change without notice.  All mortgage loan products are subject to credit and property approval.  © New American Funding, LLC. New American and New American Funding are registered trademarks of New American Funding, LLC. All Rights Reserved. Corp Office 14511 Myford Rd, Ste 100, Tustin, CA 92780. Ph 800-450-2010.  

**NAF Cash is fulfilled by NAF Cash LLC, an affiliated real estate company of New American Funding that is managed and operated in compliance with applicable legal and regulatory requirements. NAF Cash, LLC. MI Real Estate Broker #6502431375. NAF Cash LLC does not originate loans or issue loan commitments. Terms and conditions apply, not available in all states. 41050 W 11 Mile Rd, Suite 220, Novi, MI, 48375. Phone 844-344-0531. Subject to borrower and property qualifications. Not all applicants will qualify. Terms and conditions are subject to change without notice. Loan products offered by New American Funding, LLC. dba New American Funding. NMLS ID #6606 © New American Funding, LLC. New American and New American Funding are registered trademarks of New American Funding, LLC. All Rights Reserved. Corp Office 14511 Myford Rd, Ste 100, Tustin, CA 92780. Ph 800-450-2010.