Mississippi first time home buyers key ways:
- Minimum Credit Score: Typically 580 or higher for an FHA loan, other lenders may consider scores between 500-579 under certain conditions, good to go 680.
- Minimum Down Payment 0% of the home’s purchase price.
- Legal Age to Buy Property individuals must reach the age of majority, which is 21, before they can legally purchase property.
- Maximum grant of $15,000
Mississippi First Time Home Buyer Programs:
Mississippi First Time Home Buyer have access to various programs aimed at realizing their dream of owning a home in the Magnolia and Hospitality State. These programs encompass assistance with down payments or closing costs, tax credits, and grants tailored for educators seeking to purchase a home. Eligibility criteria differ; thus, this article will detail each program type available for first time home buyers in Mississippi, outlining their offerings and requirements.
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Mississippi First Time Home Buyer Loan Programs
Mississippi provides a range of down payment assistance programs suitable for both Mississippi First Time Home Buyer and repeat homebuyers. The Mississippi Home Corporation, serving as the state’s housing and finance authority, is an excellent starting point for exploring these options.
If you’re a first-time homebuyer in Mississippi, you may qualify for support through the Mississippi Home Corporation (MHC), the state’s housing finance authority.
Mississippi First Time Home Buyer Down Payment :
- The average home sale price in Mississippi is $229,200.
- The minimum down payment required in Mississippi is 3%, which for the average home price amounts to $6,876.
- A 20% down payment for the average home price would be $45,840.
- The average credit score in Mississippi is 680.
- There are home buyer grants available in Mississippi, with a maximum grant of $15,000+ offered as a forgivable loan in Jackson only, and a $7,000 forgivable loan available statewide.
Mississippi Home Corporation : Smart 6
Program Smart6, offering Mississippi first time home buyers a 30-year fixed-rate mortgage along with $6,000 designated for their down payment and closing costs. The down payment assistance is structured as a 0% interest second mortgage loan, requiring repayment only upon specific conditions, such as the sale of the house, non-owner occupancy, refinancing, or full repayment of the primary mortgage.
The Smart6 program by the Mississippi Home Corporation (MHC) provides 30-year mortgages with competitive rates and reduced mortgage insurance premiums. This initiative offers various loan options, including Freddie Mac (up to 97% financing), FHA, VA, and USDA mortgages, which can be complemented with down payment assistance funds.
Requirements:
- Household annual income cannot exceed $110,000.
- Buyer must meet credit score guidelines set by the loan servicer.
- Buyer must be a legal resident of the United States and reside in Mississippi.
- First-time and Repeat Homebuyers: The Smart6 program is available to both mississippi first time home buyers and repeat homebuyers purchasing a home in the state of Mississippi. Eligible property types include single-family homes, condominiums, town homes, duplexes, and manufactured homes (with an FHA loan).
- Household Income Limit: The household income limit for eligibility is $122,000. This means that the total annual income of the household must not exceed this threshold to qualify for the Smart6 program.
Pros:
- $6,000 in down payment and closing cost assistance.
- 0% interest loan.
- No repayment required until resale or refinancing.
Cons:
- Must meet income requirements.
- Can only be used when buying a primary residence.
- Not all loan servicers allow for use with manufactured homes.
(MHC) Mortgage Revenue Bond 7 (MRB7)
Mortgage Revenue Bond 7 (MRB7)” is another program available to Mississippi first time home buyers. It offers a 30-year fixed-rate loan along with $7,000 in down payment assistance. The assistance is provided as a 0% interest second mortgage loan with deferred payments for ten years. After this period, the loan is forgiven.
To qualify for MRB7, applicants need to meet specific criteria, including credit score minimums, depending on the chosen loan type: Fannie Mae or Freddie Mac, FHA, VA, or USDA.
Similar to the Smart6 program, there are income limits that applicants must adhere to. However, these limits vary by county. Additionally, there are purchase price limits based on the property’s location. In target areas, the purchase price limit is $332,000, while in non-target areas, it’s $275,000.
Requirements:
Household income must align with the established income limits for the area where the home is purchased.
The buyer must be a legal resident of the United States and purchase a home located in Mississippi.
The property must be a single-family home, town home, condominium, or manufactured home permanently affixed to land.
The cost of the home must not exceed the maximum allowable acquisition cost for the county in which the property is located.
Pros:
- $7,000 in down payment assistance.
- 0% interest second loan.
- Loan forgiveness after residing in the home for ten years.
Cons:
- Income limits apply.
- Property acquisition cost limits apply.
- Not available to non-U.S. residents.
The Mortgage Credit Certificate (MCC) program
The Mortgage Credit Certificate (MCC) program in Mississippi first-time home buyers with an opportunity to reduce their federal income tax burden, thereby increasing their qualifying income for a mortgage. This program offers a dollar-for-dollar tax credit on a percentage of the annual mortgage interest paid, with Mississippi allowing for a credit of up to 40%.
Qualified first-time homebuyers in Mississippi can benefit from an MCC, receiving a tax credit equivalent to 40% of their annual mortgage interest, capped at $2,000 per year. The purpose of this credit is to enhance mortgage qualification and overall affordability of homeownership.
To be eligible for the MCC program, in addition to being a first time home buyer, applicants must meet household income limits, which are determined based on county and purchase price limits.
Requirements:
Household income must not exceed allowable income limits.
The buyer must be a Mississippi first time home buyers or not have had any principal interest in a home in the past three years.
The borrower is required to complete a homebuyer education course.
The property’s cost must not exceed allowable property acquisition costs for the area.
Eligible properties include single-family homes, with certain types of manufactured homes also permitted.
Pros:
- Dollar-for-dollar reduction of tax liability.
- 40% of mortgage interest paid can be credited.
- No repayment required.
Cons:
- Income limits apply.
- Property acquisition cost limits apply.
- Not all property types are eligible.
Housing Assistance for Teachers (HAT)
Housing Assistance for Teachers (HAT) is a program designed to support teachers in Mississippi with down payment and closing costs through a grant. Eligible teachers willing to live and work in designated counties facing teacher shortages can receive up to $6,000 in assistance. The grant is forgiven if the teacher remains employed in the school district for at least three years for mississippi first time home buyer.
Requirements:
Eligible teachers must commit to serving in the school district for a minimum of three years, starting at the beginning of the school year.
Borrowers must utilize the assistance in conjunction with either a 25- or 30-year fixed-rate loan.
Borrowers are required to contribute at least 1% of the sale price toward the upfront costs of purchasing a home.
Borrowers must maintain reserves equivalent to one month’s worth.
Pros:
- $6,000 assistance toward upfront costs of buying.
- Grant forgiveness after three years of service.
Cons:
- Requirement to live and work in an area facing critical teacher shortages.
- Grant repayment obligation if the teacher serves for less than three years.
You must Read : First Time Home buyer tax Credit
Mississippi’s Home prices of major Areas:
Mississippi first time home buyer prices in Mississippi’s major areas have seen recent increases, with Hinds County experiencing a rise from $150,238 to $150,526 in median home value between the fourth quarter of 2021 and the third quarter of 2022.
These value hikes have translated into higher mortgage payments for residents, with average payments in Hinds County increasing by $272 to $779, and in Harrison County, home to Gulfport and Biloxi, by $380 to $1,008, compared to the fourth quarter of 2021. Even in the least populous Issaquena County, mortgage payments have risen from $288 to $458 during the same period.
Mississippi’s Current mortgage rate by loan type
| Loan Product | Interest Rate | APR |
| 30-year fixed rate | 7.25% | 7.55% |
| 20-year fixed rate | 6.49% | 6.71% |
| 15-year fixed rate | 6.77% | 7.11% |
| 10-year fixed rate | 7.17% | 7.93% |
| FHA 30-year fixed rate | 6.42% | 7.13% |
| 30-year 5/1 ARM | 6.46% | 7.89% |
| VA 30-year 5/1 ARM | 5.91% | 6.73% |
| VA 30-year fixed rate | 6.14% | 6.38% |
| VA 15-year fixed rate | 5.76% | 6.23% |
This table displays current mortgage rates by loan type, including both interest rates and annual percentage rates (APR).
Mississippi’s Financial Help :
For Mississippi First Time Home Buyer financial assistance, individuals can contact the EAE Client Services team at 800-948-3050. Additionally, those receiving or applying for benefits from the Mississippi Department of Human Services (MDHS) can appeal any decisions they believe are incorrect by requesting an Administrative Hearing.
