Although there is financial assistance available to facilitate buying a home, first-time homebuyers might find it to be a challenge. Using a first-time homebuyer program could be a good idea if you want to buy a property in Wyoming.
MoneyGeek’s guide explores first-time homebuyer programs in Wyoming to help you decide which one is suitable for your particular needs.
What Is a First-Time Homebuyer Program & How Can It Help?
Before purchasing a home in Wyoming, take a look at the expenses you must prepare for. A down payment is a critical part of your home-buying journey, especially since it may affect your monthly expenses. A higher mortgage down payment, for instance, can result in lower monthly payments as you will pay lower interest overall.
You can get support from many loan programs when buying a house, including down payment assistance, government-backed loans and even first-time homebuyer programs exclusive to Wyoming.
Government programs for first-time homebuyers are open to all citizens and eligible residents of the United States. However, not everyone will be eligible. For example, government-backed loans like VA loans are exclusive to military personnel and veterans.
Meanwhile, only citizens of Wyoming are eligible for first-time homebuyer programs in the state. Consequently, the ideal homebuyer program for you will vary based on your needs and unique situation, although there an extensive range of options are available.
Zero-Down-Payment Loan Programs
There are government-backed loan programs that allow first-time homebuyers to purchase a home even with no down payment, including USDA and VA loans.
A USDA home loan is a mortgage loan that can be used to fund the purchase of a home for qualified rural homebuyers. Unlike other home loans, a USDA loan does not require a down payment.
This type of loan can be used to finance the purchase of a property by both first-time and repeat buyers. Under the USDA, there are three primary mortgage programs:
- Single-Family Housing Direct Home Loans: These loans assist candidates with low incomes in obtaining mortgages.
- Section 502 Guaranteed Rural Housing Loan: This program enables candidates with low and moderate incomes to purchase their homes with 100% financing and no down payment.
- Section 504 Home Repair Program: This loan assists qualified borrowers with financing home renovations, repairs and upgrading.
MoneyGeek's explanation of USDA home loans can help you decide if these loans are the best option for you.
Since there are fewer restrictions on a VA home loan, it is an advantageous loan type for qualifying borrowers and makes refinancing or purchasing a home easier. However, only veterans and active military personnel are eligible.
One aspect that distinguishes VA loans from conventional mortgages is the fact that borrowers can apply for a loan without a down payment.
While many people think of VA loans when they think of brand-new homes, borrowers can utilize them for a variety of real estate deals. The different uses of VA loans are as follows:
- First mortgage on a primary residence
- Second mortgage on a primary residence
- Mortgage on a secondary/rental property
- Construction loans
- Reverse mortgages
MoneyGeek explains VA home loans, including their benefits and drawbacks, to help you decide if this option is suitable for you.
Low-Down-Payment Loan Programs
Homeowners in Wyoming can access low-down-payment loan programs that enable them to purchase properties with less than a 20% down payment. These programs include standard Fannie Mae or Freddie Mac loans and FHA loans.
Fannie and Freddie (Conventional) Loans
Conventional home loans are non-government-backed mortgages, excellent for first-time homebuyers.
These types of home loans are classified into two categories:
- Conforming loans that follow the requirements of Fannie Mae or Freddie Mac
- Non-conforming loans that surpass the limitations set by conforming loans
For many, affordability is the major benefit of conventional loans. A 3% down payment could get you approved for this type of loan if you have private mortgage insurance (PMI) to protect the lender in the event of a loan default. Keep in mind that this is an added expense on top of your mortgage.
For a conventional conforming loan, a credit score of 620 is required. A conventional non-conforming loan requires a score of 700. In addition, your debt-to-income ratio (DTI) should not exceed 45%.
If a mortgage is originated by a private lender and is compliant with the rules and regulations of the Federal Housing Administration (FHA), it is an FHA loan. Since they have fewer strict requirements than conventional loans, FHA home loans are a popular option for first-time homebuyers.
Borrowers of FHA loans have an option of a 15- or 30-year term with fixed interest rates, with a maximum loan amount that differs by state and county. The FHA offers a variety of home loans in addition to its mortgages.
- FHA 203(k) Loans
- Home Equity Conversion Mortgage (HECM)
- Section 245(a) Loan
- Energy Efficient Mortgage (EEM)
Mortgage insurance is a requirement of the FHA's rules, even though FHA loans have various advantages that make them more accessible.
An FHA 203(k) loan is a federally insured mortgage that combines two loan types to help with the cost of both buying and renovating a property. This type of loan combines a traditional mortgage and a construction loan, making it easier to manage payments and keep track of progress toward paying the loan off.
There are two types of FHA 203(k) loans:
- Standard 203(k) loans: Standard 203(k) loans are designed for significant structural and costly repair work, such as replacing your home's roof.
- Streamlined 203(k) loans: The best use of streamlined 203(k) loans is for straightforward aesthetic repairs or small upgrades.
It is easier to qualify for a loan because 203(k)s are a subtype of FHA loan. This means that the eligibility criteria are flexible. They are comparable to the requirements needed for a regular FHA loan.
USDA loans: For qualified rural homebuyers, USDA loans are an alternative to a mortgage that can be used to fund the purchase of a property.
VA loans: A beneficial lending option for veterans and members of the military who are currently serving to refinance or buy a home.
Fannie & Freddie loans: These are offered by private lenders and are easy for most borrowers to acquire.
FHA loans: Since they have less stringent standards than conventional loans, they are a popular choice for first-time homebuyers.
FHA 203(k) loans: A type of loan for people who want to purchase and repair a property.
Wyoming Homebuyer Programs
You can take advantage of first-time homebuyer programs in Wyoming in addition to the federal loans that are available to achieve your goal of owning a home.
WCDA Standard First-Time Homebuyer Program
The Wyoming Community Development Authority's (WCDA) Standard First-Time Homebuyer program offers a 30-year fixed-rate mortgage as well as the chance for a loan to assist with the down payment.
Home$tretch Loan Program
Any first-time borrowers who finance their homes via the WCDA’s Home$tretch Loan Program are eligible for this program. It offers qualified candidates a second mortgage of up to $10,000 at zero interest (0.080% APR based on an average loan amount of $5,500).
WCDA Amortizing DPA Loan Product
If you are using a WCDA first mortgage to finance a home purchase, you can get assistance with down payments, closing expenses, inspection fees, homebuyer education fees and borrower-paid house warranties with the Amortizing DPA Loan Product.
WCDA Spruce Up Program
If you need to fund the acquisition of a home as well as the expense of repairing it, WCDA's Spruce Up program offers mortgage and rehabilitation financing combined.
FAQs for First-Time Homebuyers in Wyoming
Making your first home purchase can be overwhelming, so MoneyGeek answered some frequently asked questions for first-time homebuyers in Wyoming to assist you.
- FHA.com. "Home$tretch Loan Program." Accessed September 26, 2022.
- U.S. Department of Agriculture. "Rural Development Single Family Housing Direct Loan Program." Accessed September 26, 2022.
- U.S. Department of Agriculture. "Single Family Housing Direct Home Loans." Accessed September 26, 2022.
- U.S. Department of Agriculture. "Single Family Housing Guaranteed Loan Program." Accessed September 26, 2022.
- U.S. Department of Agriculture. "Single Family Housing Repair Loans and Grants." Accessed September 26, 2022.
- U.S. Department of Housing and Urban Development. "203(k) Rehab Mortgage Insurance." Accessed September 26, 2022.
- U.S. Department of Housing and Urban Development. "FHA Mortgage Limits." Accessed September 26, 2022.
- Wyoming Community Development Authority. "Amortizing DPA Quick Reference." Accessed September 27, 2022.
- Wyoming Community Development Authority. "Spruce Up Wyoming I Program." Accessed September 27, 2022.