Nevada First-Time Home Buying Assistance Programs & Grants for 2022

Nevada First-Time Home Buying Guide

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    By Walecia Konrad

    (Last Updated – 07/2022)

    The Silver State is living up to its glitzy name, but for now the prized commodity may be real estate.

    Home sales prices rose 26% year-over-year to a median of $457,000 in April 2022, according to the real estate firm Redfin. Las Vegas has been on a roll, seeing a 31% spike in a year for a median sales price of $435,000.

    The message: The Nevada real estate market is hot. But first-time homebuyers and others may be able to get help to own a piece of the action.

    Who Is Considered a First-Time Homebuyer in Nevada?

    It pays to be part of the first-timers club, which is offered advantages. The group is broader than it seems at first glance.

    Anyone who has not owned a home in the previous three years is considered a first-time buyer.

    5 Nevada Programs for First-Time Homebuyers

    The Nevada Housing Division helps low- and middle-income first-time and repeat buyers, including veterans, achieve their homeownership goals.

    Here’s a closer look at the agency’s homeownership programs, which bundle down payment assistance with a 30-year fixed-rate loan.

    1. Home Is Possible for First-Time Buyers

    This 30-year fixed-rate FHA, USDA, or VA loan with competitive interest rates also offers interest-free down payment assistance of up to 4% of the total loan amount. The money can also be used for closing costs and is forgivable after three years if you stay in the home.

    There are purchase price and income limits determined by county. Participants must be buying a single- or two-family home, condominium, townhome, manufactured home, or four-unit home with one unit being the buyer’s residence.

    A minimum FICO® credit score of 660 (680 for manufactured homes) is required. There is a one-time fee of $755, paid at closing. Homebuyer education is required, which can help buyers understand how much mortgage they can afford.

    2. Home Is Possible

    This loan is available to first-time and repeat buyers who do not currently own property. This 30-year fixed-rate FHA, USDA, VA, or conventional loan offers interest-free down payment and closing cost assistance of up to 5% of the total loan amount. The loan is forgivable after three years; there is a one-time fee of $755.

    Income limits apply, depending on the number of borrowers and the type of loan. The purchase price of the home must be below $647,200.

    A minimum credit score of 640 (680 for manufactured homes) is required, as is homebuyer education.

    3. Home Is Possible for Heroes

    A VA or USDA 30-year fixed-rate mortgage with below-market interest rate is available to active-duty and National Guard military members, honorably discharged veterans, and surviving spouses. The same one-time fee of $755 as the other programs applies.

    You don’t have to be a first-time buyer to take advantage of this program. Income and purchase price limits apply, and you need a credit score of at least 640 (680 for manufactured homes). Homebuyer education is required.

    4. Nevada Home Credit Certificate Program

    The Nevada mortgage credit certificate program provides first-time buyers and qualified veterans a federal income tax credit of 30% of the interest paid on the mortgage loan each year, up to the federal $2,000 maximum. Any additional interest paid can be used as a tax deduction.

    There are fees associated with applying for and receiving a mortgage credit certificate, but the savings from the lifetime of the credit often outweigh the fees.

    5. Home at Last Rural Nevada Down Payment Assistance

    This program is offered through the Nevada Rural Housing Authority and features a no-interest, no-payment second mortgage, forgivable in three years. It’s available to first-time and repeat buyers. Income limits and credit score requirements are based on the first mortgage. There are no purchase price limits.

    Recommended: SoFi Guide to First-Time Home Buying

    How to Apply to Nevada Programs for First-Time Homebuyers

    As you might expect from the home of Las Vegas, the Nevada Housing Division’s website homebuyer section starts off with an illustrated game.

    Step 1 is to see if you meet the qualifications of one or more of the programs, and Step 2 is to contact a participating lender and get pre-approved.

    Easy-to-read details on each of the programs are available, as well as a list of lenders and real estate agents .

    Lenders are well versed in the homebuyer programs and will guide applicants from start to closing.

    Recommended: Understanding the Different Types of Mortgage Loans

    Federal Programs for First-Time Homebuyers

    Several federal government programs are designed for people who have low credit scores or limited cash for a down payment. Although most of these programs are available to repeat homeowners, like state programs, they can be especially helpful to people who are buying a first home or who haven’t owned a home in several years.

    The mortgages are generally for single-family homes, two- to four-unit properties that will be owner occupied, approved condos, townhomes, planned unit developments, and some manufactured homes.

    Federal Housing Administration (FHA) Loans

    The FHA, which is part of the U.S. Department of Housing and Urban Development (HUD), insures mortgages for borrowers with lower credit scores. Homebuyers choose from a list of approved lenders that participate in the program. Loans have competitive interest rates and require a down payment of 3.5% of the purchase price for borrowers with FICO credit scores of 580 or higher. Those with scores as low as 500 must put at least 10% down.

    Gift money for the down payment is allowed from certain donors and will be documented in a gift letter for the mortgage.

    FHA loans always require mortgage insurance: a 1.75% upfront fee and annual premiums for the life of the loan, unless you make a down payment of at least 10%, which allows the removal of mortgage insurance after 11 years. You can learn more about FHA loans in general and FHA lending limits by area.

    Freddie Mac Home Possible Mortgages

    Very low- and low-income borrowers may make a 3% down payment on a Home Possible® mortgage. These loans allow various sources for down payments, including co-borrowers, family gifts, employer assistance, secondary financing, and sweat equity.

    The Home Possible mortgage is for buyers who have a credit score of at least 660.

    Once you pay 20% of your loan, the Home Possible mortgage insurance will be canceled, which will lower your mortgage payments.

    Fannie Mae HomeReady Mortgages

    Fannie Mae HomeReady® Mortgages allow down payments as low as 3% for low-income borrowers. Applicants generally need a credit score of at least 620; pricing may be better for credit scores of 680 and above. Like the Freddie Mac program, HomeReady loans allow flexibility for down payment financing, such as gifts and grants.

    For income limits, a comparison to an FHA loan, and other information, go to this Fannie Mae site .

    Fannie Mae Standard 97 LTV Loan

    The conventional 97 LTV loan is for first-time homebuyers of any income level who have a credit score of at least 620 and meet debt-to-income criteria. The 97% loan-to-value mortgage requires 3% down. Borrowers can get down payment and closing cost assistance from third-party sources.

    Department of Veterans Affairs (VA) Loans

    Active-duty members of the military, veterans, and eligible family members may apply for loans backed by the Department of Veterans Affairs. VA loans , to buy, build, or improve homes, have lower interest rates than most other mortgages and don’t require a down payment. Most borrowers pay a one-time funding fee that can be rolled into the mortgage.

    Native American Veteran Direct Loans (NADLs)

    Eligible Native American veterans and their spouses may use these no-down-payment loans to buy, improve, or build a home on federal trust land. Unlike VA loans listed above, the Department of Veterans Affairs is the mortgage lender on NADLs. The VA requires no mortgage insurance, but it does charge a funding fee.

    U.S. Department of Agriculture (USDA) Loans

    No down payment is required on these loans to moderate-income borrowers that are guaranteed by the USDA in specified rural areas. Borrowers pay an upfront guarantee fee and an annual fee that serves as mortgage insurance.

    The USDA also directly issues loans to low- and very low-income people. For loan basics and income and property eligibility, head to this USDA site .

    HUD Good Neighbor Next Door Program

    This program helps police officers, firefighters, emergency medical technicians, and teachers qualify for mortgages in the areas they serve. Borrowers can receive 50% off a home in what HUD calls a “revitalization area.” They must live in the home for at least three years.

    Nevada First-Time Homebuyer Stats for 2022

    Here’s a snapshot of the typical home buying transaction in Nevada:

    •  Median home sale price: $457,000

    •  3% down payment: $13,710

    •  20% down payment: $91,400

    •  Average credit score(vs. the U.S. average of 714): 701

    Financing Tips for First-Time Homebuyers

    In addition to federal and state government-sponsored lending programs, there are other financial strategies that may help you become a homeowner. Some examples:

    •  Traditional IRA withdrawals. The IRS allows qualifying first-time homebuyers a one-time, penalty-free withdrawal of up to $10,000 from their IRA if the money is used to buy, build, or rebuild a home. The IRS considers anyone who has not owned a primary residence in the past three years a first-time homebuyer. You will still owe income tax on the IRA withdrawal. If you’re married and your spouse has an IRA, they may also make a penalty-free withdrawal of $10,000 to purchase a home. The downside, of course, is that large withdrawals may jeopardize your retirement savings.

    •  Roth IRA withdrawals. Because Roth IRA contributions are made with after-tax money, the IRS allows tax- and penalty-free withdrawals of contributions for any reason as long as you’ve held the account for five years. You may also withdraw up to $10,000 in earnings from your Roth IRA without paying taxes or penalties if you are a qualifying first-time homebuyer and you have had the account for five years. With accounts held for less than five years, homebuyers will pay income tax on earnings withdrawn.

    •  401(k) loans. If your employer allows borrowing from the 401(k) plan that it sponsors, you may consider taking a loan against the 401(k) account to help finance your home purchase. With most plans, you can borrow up to 50% of your 401(k) balance, up to $50,000, without incurring taxes or penalties. You pay interest on the loan, which is paid into your 401(k) account. You usually have to pay back the loan within five years, but if you’re using the money to buy a house, you may have up to 15 years to repay.

    •  State and local down payment assistance programs. Usually offered at the regional or county level, these programs provide flexible second mortgages for first-time buyers looking into how to afford a down payment.

    •  The mortgage credit certificate program. First-time homeowners and those who buy in targeted areas can claim a portion of their mortgage interest as a tax credit, up to $2,000. Any additional interest paid can still be used as an itemized deduction. To qualify for the credit, you must be a first-time homebuyer, live in the home, and meet income and purchase price requirements, which vary by state. If you refinance, the credit disappears, and if you sell the house before nine years, you may have to pay some of the tax credit back. There are fees associated with applying for and receiving the mortgage credit certificate that vary by state. Often the savings from the lifetime of the credit can outweigh these fees.

    •  Your employer. Your employer may offer access to lower-cost lenders and real estate agents in your area, as well as home buying education courses.

    •  Your lender. Always ask your lender about any first-time homebuyer grant or down payment assistance programs available from government, nonprofit, and community organizations in your area.

    The Takeaway

    Nevada helps many first-time homebuyers claim their fortunes in the Silver State. Other first-time buyers in Nevada can look for the right fit on their own among government-backed and conventional loans.

    Make your dream of being a homeowner come true with SoFi’s competitive mortgage rates and down payments as low as 3% for qualifying first-time homebuyers.

    View your rate


    FAQ

    Should I take first-time homebuyer classes?

    Yes! Good information is key to a successful home-buying experience for anyone, but especially for newcomers, who can easily be overwhelmed by the jargon, technicalities, and magnitude of applying for a mortgage and purchasing a home. First-time homebuyer classes can help. Indeed they are required for some government-sponsored loan programs.

    Do first-time homebuyers with bad credit qualify for homeownership assistance?

    Often they do. Many government and nonprofit homeowner assistance programs are available to people with low credit scores. And often, interest rates and other loan pricing are competitive with those of loans available to borrowers with higher credit scores. That said, almost any lending program has credit qualifications. That’s why it’s important to take all possible steps to improve your credit standing before you go house hunting.

    Is there a first-time homebuyer tax credit in Nevada?

    Yes. Nevada offers mortgage credit certificates to qualified borrowers, who can take a federal tax credit of as much as 30% of the interest paid on a first mortgage, up to $2,000 each year. The credit comes with fees but lasts for the lifetime of the first mortgage.

    Is there a first-time veteran homebuyer assistance program in Nevada?

    Nevada has a special home buying program for active service members, veterans, and surviving spouses, who do not have to be first-time borrowers. Nevada veterans may also may find options in the federal VA loan programs listed above.

    What credit score do I need for first-time homebuyer assistance in Nevada?

    Programs administered by the Nevada Housing Division and Nevada Rural Housing require a credit score of 640 or above (680 for manufactured homes). There are other private, state, and federal loan programs that borrowers with lower scores may be able to access.

    What is the average age of first-time homebuyers in Nevada?

    Data about first-time homebuyers in Nevada is hard to come by, but the average age nationally is 33.


    Photo credit: iStock/LPETTET
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