- You may qualify for grants, but get approved before you buy
This is "free" money available for some repairs and qualified buyers. Be aware that for this "free" money there may be restrictions on how to use it and you need to get qualified before you purchase the house. Free never is free, but typically it's worth investigating.
- You may qualify for special low-interest loans for the repairs
Programs offered by ACTS Housing and the City of Milwaukee could help you get a low interest loan for the repairs of the house. Be aware this typically needs to be approved before you purchase the home.
- Buying is only 25% of the battle
Understand that buying a home in cash typically means you'll have repairs to do. You need to understand these costs and even if you do everything yourself there will be material costs, surprises, costs to maintain the house before you move in, permit fees, and other costs. Develop the budget and list of repairs BEFORE you buy.
- You may qualify for grants
Local homebuyer counseling agencies like ACTS Housing and Housing Resources, Inc. have access to special downpayment and closing cost grants to lower what you'll need to bring to closing or your total loan amount. You won't know if you qualify or they are available until you get close to your purchase time.
- Consider your mortgage options
You can actually look at as many loan products and programs as you'd like, working with a bunch of possible lenders at once without it costing you money. Ask for information you can use to compare the products that are offered. This can typically all be done without paying anything, but be sure to do it all at the same time or your credit score might get hit with all the inquiries.
- Work with your Realtor to get a seller credit if you need one
Even if you can't qualify for grants, you can get a "grant" from the seller of the property. In some cases, your Realtor can negotiate a seller contribution towards your closing costs. This will bring down the total cash you need to close.
Rent to own
- Is it a Rent to Own Transaction or a Program?
It's important to have the support you need and an accurate Buying Plan in place BEFORE you enter a rent to own purchase. The worst thing that can happen is you put up-front money in you could lose and then don't have a realistic way to buy the property.
- Eveything is still negotiable
Sometimes people think that since it's rent to own you can't negotiate. You can. Consider the monthly rent, the timeline, the upfront cash, the purchase price, the repairs being done, etc. These are all negotiable terms to be negotiated by your team, not just given to you by the seller. Keep in mind that the Seller may be offering good terms you should take, but not necessarily. Seek independent advice for these important choices.
- You can still qualify for grants when it comes time to buy
While you can't get grants to enter rent to own programs, you can still qualify for available grants when you re-apply for your mortgage and buy the property. Once approved, be sure to check with your homebuying counselor to identify grants that might be available.
Written by Mary Leach-Sumlin, Any House Realty
Mary Leach-Sumlin is the owner/Broker of Any House Realty, which she founded in 2017. Prior to launching her own real estate firm, Mary was a Realtor for ACTS Housing since 2007, and then the Managing Broker. She has an office located inside St. Martin de Porres Parish on 2nd and Burleigh. She holds the Accredited Buyer's Representative designation. She has helped more than 200 families achieve their homeownership dreams. You can email her at email@example.com