This City Offers Interest-Free Loans Up to $40K for First-Time Home Buyers

First-time home buyers may be eligible for a 40k loan to cover closing cost expenses.

If you're searching for affordable cities and could benefit from incentives for new home buyers, take a look at Provo, Utah. Since it's the third-largest city in Utah, there are plenty of things to see and do. If you have dreams of homeownership, you can also see if you're eligible for the city's interest-free first-time home buyer loan. It's a zero-interest loan to cover up to $40,000 in closing costs.

Provo is one of the most affordable places to live in the United States. The estimated cost of living is $61,145, while the median household income is $79,152. On top of that affordability, Provo has a Home Purchase Plus Down Payment Assistance Program which provides loans to cover down payment and closing costs.

How the program works

The Home Purchase Plus Down Payment Assistance Program helps individuals and families with low to moderate incomes purchase a home, and provides a payment-deferred loan with 0% interest to qualified first-time home buyers. They can use this loan to cover the closing costs for a mortgage on a single-family residence within Provo City.

The loan remains 0% interest as long as the buyer lives in and owns the house. Once the home is sold, the loan is due and payable in full. If the buyer sells the home or vacates within two years of purchase, a $5,000 prepayment penalty is applied.

Here are the requirements for eligibility:

• Applicants must first obtain a first mortgage loan.
• Applicants must have a credit score of at least 650.
• The applicant's liquid assets must not exceed $15,000 at the time of closing.
• The property must be a single-family home in Provo City.
• The property must not exceed a maximum purchase price of $316,000.
• The buyer must not have owned a primary residence within the last three years.
• The buyer must be able to put down $1,000 of their own money.
• The total household income must not exceed income limits of the program.

Here's a breakdown of the program's income limits:

• 1 person: $45,050
• 2 people: $51,145
• 3 people: $57,900
• 4 people: $64,300
• 5 people: $69,450
• 6 people: $74,600
• 7 people: $79,750
• 8 people: $84,900

How much money is available?

Lending is based on need. The amount of the loan depends on the home purchase price and the applicant's credit score. The total loan amount must not exceed 20% of the home purchase price, and the total loan amount must not exceed $25,000 for applicants with a credit score below 700. For applicants with a credit score of 700 or above, the total loan amount must not exceed $40,000.

If you're looking to move to an affordable city in the United States, consider Provo. You'll enjoy the benefits of a cost of living index 3% below the national average. Plus, you may be eligible for this first-time home buyer loan to cover the cost of your home closing. Considering that home closing costs can add up quickly, this is a helpful program.