SACRAMENTO, Calif. — The biggest purchase of your life is your home, and the federal government has plans and programs aimed at helping make homeownership more attainable.
Homeownership is the primary way American families build wealth and create economic security.
Real estate professionals like Marvin Wells want to help when it comes to buying your first home.
“It's always a solid investment to buy something that you can not only live in, raise a family and create memories in, but at the same time, it’ll grow in equity over the course of the years that you're going to live in it,” said Wells.
According to U.S. Treasury officials, in the second quarter of 2022, the homeownership rate for White households was 75% compared to 48% for Hispanic households, 45% for Black households and 57% for non-Hispanic households of any other race.
President Joe Biden announced plans March 9 to launch a first-generation down payment assistance program to help make the dream of homeownership a reality for more people.
ABC10 asked Wells about the challenges first-time homebuyers face.
“A lot of them will try to use down payment assistance and what happens is they either don't qualify for it because their credit score is too low or they make too much money,” said Wells.
The Biden administration says the program would help close the racial homeownership gap. It estimates more than 35% of potential program participants will be African American and more than 25% will be Latino.
First-time homebuyers need to meet some strict parameters to participate in the program, including: Their parents don’t own a home AND their income must be at or below 120% the area median income or 140% if they live in a high-cost area.
“There's not a real program that's getting people in the door without having to come out of pocket $20,000-30,000 right now. If they do, they're better off going with a conventional rate and putting 3% down and getting a closing cost credit,” said Wells.
An experienced real estate agent can help you understand what you qualify for and what your best options are beyond government programs.
There’s also a lot of talk about high federal interest rates.
“If you’re afraid of the rates right now, don’t be,” said Wells. “Date the rate, marry the home.”
A higher interest rate can have its advantages for first-time homebuyers.
“Get with an agent that can negotiate that rate buy-down, can get you some credits awarded to you by the seller,” said Wells.
Higher rates have cooled the market, meaning less competition for a home and more leverage for negotiation.
"If rates get worse, at least you locked in the best possible rate you could have at that time,” said Wells.
WATCH MORE: First-time home buyers may be eligible to apply for California's down payment assistance program
