What to know about buying a house in Georgia

If you’re a Georgia first-time home buyer, you’re probably feeling nervous. And that’s fine. First-time buyers often find the experience daunting.

But the Peach state provides serious support in the form of home buyer education courses and counseling. And, better yet, you could be in line for cash assistance to help cover your down payment and closing cost needs.

Ready to get started?

Verify your home buying eligibility in GA. Start here (Sep 10th, 2021)

In this article (Skip to…)

Georgia home buyer overview

The average home purchase price in Georgia jumped 18% between mid-2020 and mid-2021, according to the Georgia Association of Realtors.

This can be challenging for Georgia first-time home buyers who see the gap between their savings and their down payment needs widening instead of narrowing. If you’re in that predicament, read on to discover grants and loans that could help you bridge that gap.

If you’re eligible, you might be moving into your first home sooner than you dreamed possible.

Georgia Home Buyer Overview
Average Home Sale Price in GA $365,900
Minimum Down Payment in GA (3%) $10,980
20% Down Payment in GA $73,190
Average Credit Score in GA1 689
Maximum GA Home Buyer Grant2 $14,000 loan forgivable over five years (Atlanta)

Down payment amounts are based on the state’s most recently available average home sale price. “Minimum” down payment assumes 3% down on a conventional mortgage with a minimum credit score of 620.

If you’re eligible for a VA loan (backed by the Department of Veterans Affairs) or a USDA loan (backed by the US Department of Agriculture), you may not need any down payment at all.

Verify your home buying eligibility in GA. Start here (Sep 10th, 2021)

First-time home buyer loans in Georgia

If you’re a first-time home buyer in Georgia with a 20% down payment, you can get a conventional loan with a low interest rate. And you never have to pay for private mortgage insurance (PMI).

Of course, few first-time buyers have saved enough for 20 percent down. But the good news is, you don’t need that much. Not by a long shot.

Borrowers can often get into a new home with as little as 3% or even 0% down using one of these low-down-payment mortgage programs:

  • Conventional 97 — From Freddie Mac or Fannie Mae. 3% down payment and 620 minimum credit score. You can usually stop paying mortgage insurance after a few years
  • FHA loan — Backed by the Federal Housing Administration. 3.5% down and a 580 minimum credit score. But you’re typically on the hook for mortgage insurance until you refinance to a different type of mortgage, move, or pay off your loan
  • VA loan — Only for veterans, active military members, reservists, and National Guard. Zero down payment is required. Minimum credit score varies by lender but often 620. No ongoing mortgage insurance after closing. These are arguably the best mortgages available, so apply if you’re eligible
  • USDA loan — For those on low-to-moderate incomes buying in designated rural areas. Zero down payment required. Credit score requirements vary by lender but often 640. Low mortgage insurance rates
  • Georgia Department of Community Affairs (DCA) — May include competitive interest rates and can be used with down payment assistance. More information below

Note that most of these programs require you to buy a primary residence. That’s a home you’ll live in full-time, not a vacation home or investment property.

Depending on the mortgage loan you choose, you could potentially get into your new house with minimal cash out of pocket.

These programs even let you use gifted money or down payment assistance (DPA) to cover the down payment and closing costs.

If you’re not sure which program to choose for your first mortgage loan, your lender can help you find the right match based on your finances and home buying goals.

Find the best first-time home buyer loan for you (Sep 10th, 2021)

Georgia first-time home buyer programs

The Georgia Department of Community Affairs (DCA) operates statewide. And it has a list of approved homebuyer education agencies. But if you want an all-online course, you’ll have to use eHome America’s service.

Of course, not all first-time buyers need to receive homeowner education. But it’s mandatory if you wish to get a mortgage or receive down payment assistance through the DCA. You will also need to choose a participating lender from the program’s list.

Those lenders will hook you up with a Georgia Dream loan. That might be a conventional mortgage (one not backed by the government) or an FHA, VA, or USDA loan (see above).

Georgia first-time home buyer grants

There are a variety of down payment and closing cost assistance programs in every state. There may be options in your local area, so ask your real estate agent or loan officer if you’re hoping to get a home buyer grant.

If you use the Georgia Dream home loan program, you might be eligible for a down payment loan as well.

This isn’t a grant. But it’s an interest-free loan with no monthly payments. You repay it in full when you sell the home, refinance, or move.

There are household income limits and purchase price limits which vary by county. So download a PDF of the Georgia Dream brochure to see if you’re eligible. That’s available in English and Spanish.

The current standard assistance is $7,500, which is available to all eligible applicants statewide. But that rises to $10,000 if your household contains a disabled person or someone who is a protector, educator, or nurse (PEN). That PEN also embraces those who work in those “industries,” as well as those active in the military

DCA says it sometimes runs other programs, too, so you should ask for details on any that are current in case they offer you a better deal.

Verify your home buying eligibility in GA. Start here (Sep 10th, 2021)

Buying a home in Georgia’s major cities

Unusually, home price inflation has been lower in Georgia’s three biggest cities than in the wider state. But it’s still high, especially in Atlanta. So if your savings need an extra boost, look into the homeownership programs listed below.

Atlanta first-time home buyers

The median list price in Atlanta was $394,900 in July 2021, according to Realtor.com. That was up 13.8% year over year.

If you want to buy a home at that median price, your down payment options might fall between:

  • $11,850 for 3% down payment
  • $78,980 for 20% down payment

Atlanta has a dazzling array of down payment assistance programs, many of which are more attractive than the DCA’s statewide offering. These include:

  • HOME Atlanta 4.0 — A whopping 3.5% grant (never needs repaying) on FHA or VA mortgages
  • Atlanta Affordable Homeownership Program — “Homebuyers receive up to $14,000 toward the down payment and/or closing costs that is fully forgiven after living in the home for 5 years”

There are also programs that cover particular neighborhoods, including Vine City and Intown. Click the link to access full details, including terms, conditions, and eligibility requirements.

Augusta first-time home buyers

The median list price in Augusta in July 2021 was $169,900, according to Realtor.com. That was up 9.7% year over year.

If you want to buy a home at that median price, your down payment options might fall between:

  • $5,100 for 3% down payment
  • $33,980 for 20% down payment

You can get down payment assistance of $500-$5,000 if you’re buying a single-family home in Augusta-Richmond County. Although that’s an interest-free loan, it’s forgiven in equal parts over five years. So, providing you remain in residence and don’t sell or refinance, you should owe nothing at the end of the fifth year.

As with all these programs, there are loads of terms, conditions, and eligibility criteria. So download the 10-page Augusta Down Payment Assistance Manual (PDF) for the lowdown.

Columbus first-time home buyers

The median list price in Columbus in July 2021 was $169,900, according to Realtor.com. That was up 6.9% year over year.

If you want to buy a home at that median price, your down payment options might fall between:

  • $5,100 for 3% down payment
  • $33,980 for 20% down payment

The Columbus Homebuyer Assistance Down Payment Assistance Program offers up to $10,000, but can’t exceed 5% of the sales price. And you cannot use that money for closing costs.

It comes in the form of an interest-free loan. But it’s not clear whether that will ultimately be forgiven or will require repayment.

If you’re interested, you should call the Columbus Community Reinvestment department on (706) 225-3916 and request further details.

Where to find home buying help in Georgia

All the organizations we’ve listed above should provide advice freely to any first-time home buyer in Georgia or their local area.

In addition to our selection, the U.S. Department of Housing and Urban Development (HUD) provides a few lists for statewide, regional, and local resources.

The Georgia Dream Homeownership Program is the main statewide home buyer program. But check out HUD’s webpage for Georgia first-time home buyers to see programs at the county and city level.

Note that HUD provides two forms of funding, the Community Development Block Grant (CDBG) and the HOME Investment Partnerships program. And you might be eligible for both. So check out the ones where you are so you can choose the better.

What are today’s mortgage rates in Georgia?

You can see today’s live mortgage rates in Georgia here.

When you’re ready to start the home buying process, make sure you get personalized rate quotes from at least three mortgage lenders.

Don’t just look at advertised rates online; actually apply for preapproval and compare the interest rates and fees you’re offered. That’s the only way to know you’re getting the best deal possible on your new home loan.

Verify your new rate (Sep 10th, 2021)

1 Source: Experian.com 2021 study of 2020 data

2Based on a review of the state’s available DPA grants at the time this was written

Source link