When you are purchasing a home and you are a first-time home buyer, you might be eligible to several loan programs that are designed to assist you with your down payment and closing costs. These programs may include Down Payment Assistance (DPA), Closing Assistance, Government-Backed Loans, etc.
However, how to we know if you are a first-time home buyer?
To be considered a first-time home buyer, you cannot have any ownership interest in your primary residence for the past three (3) years. This being said, any person who owned and sold a property five years ago can still be considered a first-time homebuyer provided that he does not have any ownership interest to any property for the past three years.
A person who owns a rental property but also rents his current residence for the past three years can also be considered a first-time home buyer. This is a little tricky but we just need to stick to the definition that a first-time home buyer cannot have ownership interest in his primary residence for the past three years.
The gist of the determination has reference to the primary residence.
Here is another scenario:
A person who lives with his parents was put on the title because his parents wanted to secure their property just in case something happened to them. He cannot be considered a first-time home buyer because putting his name on the title establishes ownership. So regardless if he is paying rent or not, he would have ownership interest on said primary residence. It will be a different story if he can prove that he lives in a separate apartment and he is renting said apartment.
What about if you live in a mobile home that you own?
If the mobile home is permanently attached to a foundation, it is considered a real property and you cannot be considered a first-time home buyer.
There are a lot of scenarios out there but the key consideration is that you do not have ownership interest in your primary residence for the past three (3) years.
Talk to your Loan Officer if you still have some questions regarding this.
