With the economy in it’s current state and the housing market seen as the culprit, you can expect that the government is focusing on stimulating housing and home buying.  As a first time home buyer you are already guaranteed an $8000 tax credit if you purchase between January first and November of 2009.

Here is a local first time home buyer program offered by the City of Santa Clara.  It is a $75,000 dollar second mortgage provided by the city towards the purchase of a home in Santa Clara.  Here are some more details below:

City of Santa Clara 1st Time Home Buyer’s Financing Program

How Does The Financing Program Work?
The Financing Program helps first time home buyers purchase a single-family house, town home, or condominium located in the City of Santa Clara.

Who Is Eligible?
People who have not owned a home in the last three years, People whose annual household income is no greater than 120% of the County’s median income (as calculated based on your household size).

What is the maximum assistance amount?
The maximum City second mortgage is $75,000.

Minimum Down Payment Requirement:
3% of the purchase price, more may be required to qualify

What Are The Terms Of The Second Mortgage?
The City’s second mortgage will be a 20-year loan structured in the following way:
For the first 5 years, the City’s loan will be zero percent interest with no payments;
Starting the sixth year through the twentieth year, the City loan converts to the interest rate of the primary loan, and monthly amortized payments of principal and interest are paid.

Is there any equity share with the city if I sell my home?
No, terms are as above.

What loan programs can I go through? Can I refinance if rates come down?
You can go through any approved conventional 30 year fixed mortgage including FHA or CALHFA for the first mortgage. Yes you can refinance as long as it’s a fixed mortgage and no cash out other than to pay off the city loan.

What kind of interest rate can I expect on the first loan?
The interest rates are market rates determined based on the first mortgage guidelines on credit scores and down payment based on program guidelines.

What is the process to get this program?

1. Get pre-qualified to determine maximum purchase price and loan amount (apply online or request application)
2. Provide supporting income and asset documentation
3. Once your pre-approval letter is issued, go out and look for your home!
4. Once you are in contract to purchase, the escrow period to close will take a normal 30 day time frame to close
    

Schedule of 2006 income limits-120% of median income adjusted to family size:

Household Size Maximum Income

•  1 – $ 88,600
•  2 – $101,300
•  3 – $113,900
•  4 – $126,600
•  5 – $136,700
•  6 – $146,900
•  7 – $157,000

To get started download the prequal application:  santa-clara-first-time-home-buyer-prequal

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In Santa Clara County credit is everything.  A poor credit rating can affect your purchasing power and your ability to get a home loan. If you have a poor credit history there are many things you can do to restore your credit.  Don’t rely on paying these professional institutions to restore your credit.  Most of these companies are scams and offer guarantees that are unenforceable. 

Feel confident that with some diligence you can restore your credit yourself and through the process learn about creating a good credit history.

Make sure your credit file is accurate. Credit files are maintained by three credit reporting agencies—Experian, Trans Union and Equifax. You can contact one of them and request a copy of your credit report for a small fee. Review the report for errors and outdated information. If you feel that any of the reported information is inaccurate, you can request that the date be removed. The credit agency will contact the creditor who has 30 days to respond and confirm the disputed items. If they do not verify it, the date will be deleted. If the creditor verifies that the information is accurate, you can write a 100-word statement explaining your position and have the credit reporting agency include it in your credit file.

Contact your creditors. Some creditors will remove derogatory information from your credit file if you pay a full or partial payment towards the debt. They may also “re-age” the account by making the current month the first repayment month, thus showing no late payments. You can call the creditor directly to do this.

Add positive information to your file. Send information to the credit bureaus that shows stability and the ability to make payments on time. For any accounts on your credit report that do not show you pay on time, you can send account statements and copies of cancelled check to show your payment history, and the credit bureaus may add them to your history. If you have long-term employment, have lived in the same place for a length of time, etc., be sure to add documentation to your file that shows this stability.

Get credit in your own name.If you are married and your spouse has had financial problems, be sure that you establish credit in your name alone.

Re-establish good credit.If you have had credit problems in the past (especially a bankruptcy or a foreclosure), it is important that you re-establish good credit. There are several ways to do this:

• Get a secured credit card. Many banks will, in exchange for a sum of money deposited with them, give you a credit card. Use the card and make the payments on time. Your credit rating can quickly improve.

• Obtain a secured loan. If you have a passbook savings account or can open one, ask the bank to give you a loan against that money. They keep your passbook until the loan is paid in full. Make sure the bank reports on the loan to the credit bureau.

• Work with a local store. Some businesses will give you credit on a purchase regardless of your credit standing. Although you may pay a higher rate of interest, this in another way of re-establishing good credit.

• Satisfy judgments, liens and collections whereever possible. Make it a priority to satisfy any unpaid judgments, liens, and collections against you, or at the very least try to negotiate with these creditors.

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This is an informative and yet entertaining look on what home sellers need to focus on when selling a home.  I agree with all of these principles, but understand that some flexibility is necessary due to special circumstances.   Nevertheless, if you stick to these principles you should be able to sell your home for the best price the market will provide.  Lets not forget however, you must market the home and that’s the job of any good real estate professional. 

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