NH Housing Mortgage Pros and Cons

Would you like to save money on the purchase of your first (or next) NH home?
Interested in the lowest NH mortgage rate?
Are you a big fan of mountains of paperwork? :)
NH Housing Loans are provided by the New Hampshire Housing Finance Authority (NHHFA), a great group of folks headquartered in Bedford, NH. While most people think of this NH mortgage program as "just for first time home buyers in NH", many who have used the program have owned a home before. The fact is that everyone in NH who's interested in buying a home should at least consider the NH Housing loan program.
After 20 years of reviewing the program with NH home buyers, I know the basic questions (and answers) that come up when someone first considers the program. Let's look at a few of them.

NH Housing loans, like all NH mortgage options, have pros and cons. If you're a NH first time home buyer, the benefits are many but there are a few things that you need to keep in mind. One of the biggest issues these days is the fact that if you finance with NH Housing, the home must be owner occupied as long as the NH Housing mortgage is in place.
I've spoken with many NH home owners this past year who purchased their first home, let's say a NH condo, using the NH Housing program a few years ago. Their family has since grown by one (or more!) and they find that the place is a bit small for their growing family. Because the NH realty market has so many homes for sale (and many of them are NH foreclosures or short sales) , they cannot sell their NH condo without having to take a loss on the sale and because the NH Housing mortgage is in place, they are not able to rent the home out while they move into a bigger home and wait for the NH real estate market to improve.
This is a real life example that's playing itself out across the state.
Now, NH home prices are pretty low and while they may fall a bit more, most NH real estate pros feel that the worst is behind us. Buying a NH home right now and using the benefits of a NH Housing mortgage is probably a good idea to consider. Just keep in mind what you think your housing needs may be for the next 4 to 6 years so that you don't outgrow your home!

Typically, the 2 biggest obstacles to buying your first home are
A) Monthly Payment and
2) Cash to Close
The NH Housing Grant option can go a long way to helping with #2!

The basic idea behind the Grant program follows the same market principals as conventional financing or, really, market fundamentals across all commerce: You get more when you pay more.

For example; if the going NH mortgage rate with zero points is X, an investor looking to buy that mortgage debt is willing to pay Y for the benefit of having that X interest rate debt for 30 years (There's more to it than this but this explanation works for my tiny little brain!). For an interest rate of X plus .25%, the investor is willing to pay more because they'll have that debt paying them a higher interest rate for the term of the loan.

The investor is buying the loan (they think of it as a really big CD or savings account) because it's typically a safe investment backed by collateral (i.e. your home) and the premium that they're paying for the higher interest rate is what would be called the Grant under the New Hampshire Housing loan program.

With certain restrictions, this Grant can be used to pay towards any of the 3 parts that make up the total Cash to Close when buying a NH Home:

Closing Costs
Pre Paid and Escrow Items
Down Payment

This has really made the difference for many of my clients in realizing their goal of owning a NH Home!

It does comes at a price, so it's important to review the Pros (cash assistance) and the Cons (higher interest rate) of this and all NH mortgage options. And we have a NH mortgage calculator custom made for just this type of review! Check the link list below!

Question: When is a person who has owned a home before considered a NH first time home buyer?
Answer: When they haven't owned a home in the last 3 years.
Crazy, right? I know. But I don't make up these rules, I just follow them!

But let's say that you have owned a home in the last 3 years. Let's say that you're currently selling a NH home and your NH real estate agent has made the dreaded phone call to tell you that you need to drop the price on your home (again!) so there goes the cash you were going to use to buy your next NH home. What do you do? Cash strapped, looking at even lower cash out of your current home, that NH Housing Grant looks awful good but that's not an option for me .... WRONG!

Okay, that was fun ...

NH Housing Finance Authority has something called "Targeted Communities" (There's a link in the list below). These communities are targeted for NH Housing funds and the program waives the first time home buyer restriction for these communities! And they're nice NH towns, too!
Of course the income and purchase prices restrictions still apply so it still may not be an option but if it is then it certainly makes that dreaded NH real estate agent call a little easier to bear knowing that the cash you may be losing on your sale may be made up a bit with the help of the NH Housing loan program.

Okay, you've made it this far and you'd like to get more info but you're still not ready to talk to the pushy mortgage sales person (that day will come, my friend,. Oh, it will surely come ...)
Just click the image to the right and get the new NH Housing Microwave report. This new report includes links to calculators, guidelines and other helpful info with planned worksheets, interviews and more. Go ahead, get the facts!

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