Rocket City Roots: Tips for First Time Home Buyers

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Buying a home is traditionally the biggest purchase a person will ever make. Home ownership is also an essential part of making the American Dream come true.

The benefits of owning over renting are numerous, including wealth building over time through equity, ownership pride, and community pride. There is also no need to worry about noise pollution, as is the case with apartment residents.

According to the latest population censuses, the home ownership rate is around 65% nationwide. Alabama’s rate is higher at 72.5%.

With more than 100 people moving to the Huntsville metropolitan area each week, the housing market is booming. This is good news for sellers, but it can be frustrating for buyers. According to the Alabama Center for Real Estate, the offering fell 58% year over year in May. The average sales price increased by 14% year-on-year.

Zelda Friedman, the 2021 president of the Huntsville Area Association of Realtors, said nine days is the average time a home in the greater Huntsville area is on the market.

“That’s a historically low number,” she said.

However, first-time buyers shouldn’t be afraid. There are a number of programs to help shoppers, including some offered by the City of Huntsville.

Plan ahead

When first-time buyers aren’t ready to step into the market, there are some benefits to waiting. Those who dream of swapping an apartment terrace for a front yard are often financially unwilling to take the plunge.

A photo of a large brick house, green courtyard with a "For sale from the owner" Characters in the foreground.

Those who dream of swapping an apartment terrace for a front yard are often financially unwilling to take the plunge.

Lauretta Moore, a planner with the Huntsville community development division, said buyers need to do their homework and get better financially before buying a home.

“Borrowers with income problems are discouraged,” she said. “It’s hard to compete with investors with cash. The best thing you can do is invest in yourself because when you are ready you don’t have to prepare. “

Friedman said it is becoming more common to see desirable properties in a bidding war. Like Moore, she said it was difficult for first-time buyers to compete.

“I’ve seen salespeople put a lot of money down (to seal the deal),” she said.

To go to school

The most important thing buyers can do is educate themselves not only about the market but also about financial responsibilities before closing. Buying a home, especially for first time buyers, isn’t as easy as finding a home, obtaining a loan, and signing on the dashed line. It is an often arduous process that can take weeks – sometimes months.

A graphic with a chalkboard background with a house, plus sign, dollar sign, equal sign, and a question mark.

If buyers have serious credit problems that need to be resolved, they should work with professional credit counselors before considering a home purchase.

“The biggest barriers for first-time buyers are a down payment and a credit history,” said Moore. “Before anyone even looks for a house, they have to know what they can buy.”

Fair credit scores range from 580 to 669 while 670-739 is considered good. Credit scores of 800 and above are considered excellent. A higher credit rating is important as it often determines the interest rate on the mortgage.

Most brokers first ask potential buyers if they have a prequalification letter from a bank or lender. The letter requires a credit check which can lower a credit score. Moore said prospective buyers should avoid services that promise free creditworthiness and stick with the “Big 3” credit bureaus – TransUnion, Equifax and Experian.

If buyers have serious credit problems that need to be resolved, they should work with professional credit counselors before considering home ownership.

For first-time buyers who want more in-depth knowledge, courses and programs are available, including one that Moore is moderating through Community Development in collaboration with the Family Services Center (FSC).

Community Development also runs an annual Housing Expo this fall, which brings together experts to discuss available funding options for housing programs, as well as tips for buyers and tenants.

Other courses, such as one from the National Association of Real Estate Brokers-Huntsville, are specifically aimed at the underserved. FSC and Community Action Partnership of Huntsville / Madison and Limestone Counties, as well as local HUD-approved housing companies, also offer training and credit counseling courses for homebuyers.

“The best a potential homebuyer can do is to gather all the knowledge they can so that they can present themselves as financially responsible, have good reserves, and good credit,” said Moore.

Available resources

Even when first-time buyers save and save for months, it can be difficult to raise enough cash to pay a down payment. For this purpose, Community Development offers a Down Payment Assistance Program (DAP), which provides up to USD 7,500 for a down payment and closing costs, depending on individual needs. Applicants must meet the admission requirements and be willing to live in the property for at least five years.

The program was launched in 2004 at the urging of Turkessa Coleman, a community development planner. Troubled by the challenges of low- to middle-income buyers, she worked with the U.S. Department of Housing and Urban Development (HUD) to raise additional funding for the program.


I think we all wish we could reach that level of the American dream, and home ownership is the thing. Providing first-time homebuyers the tools and resources they already have will help them achieve this.


She said the program has helped numerous families, including a woman Coleman saw again many years after buying a home with DAP funds.

“She told me, ‘That was the best move I could take,'” Coleman said, adding the woman was a single mother with two children. “She has a better job now, a bigger house, and her children are thriving. Such stories fill my heart because they become more than just a deposit; it is a community-based solution. “

Community Development also offers the Single Family Home Ownership Program, which provides new three-bedroom and two-bath homes to qualified applicants in the Terry Heights and Edmonton Heights neighborhoods.

Last hurdles

Once potential homebuyers have their finance home in order, they can begin their search. Friedman said that having a real estate agent can make a first-time buyer experience a lot smoother.

A graphic with a model of a house and a key on the plans of the house plan.

If the seller accepts an offer, there are still many hurdles to overcome before moving companies can be called.

Brokers can also help buyers secure funding or educate them about the offers available. Some banks offer no money down loans, but the interest rates can be far higher. Depending on the loan, a lender may also waive the lending fees, which can save buyers money.

Loans vary by lender, and this is especially true for government insured loans like FHA, VA, and USDA. These loans are not only dependent on economic suitability, but also on the condition and location of the house.

Regarding a buyer’s wish list, Friedman suggested making a list of must-have items. However, she added that homebuyers shouldn’t expect to find a home that meets all of the criteria. She also said buyers shouldn’t be discouraged if their first offer is turned down. Buyers should also know that a home is not under contract until the seller has signed the listing.

“I’ve seen buyers fall in love with a house and party only to find out they didn’t get the house,” Friedman said.

If the seller accepts an offer, there are still many hurdles to overcome before moving companies can be called. The appraised value of the home must meet or exceed the loan amount before the mortgage terms can be completed. Buyers are also strongly advised to have the property examined for possible problems that will be borne by the buyer.

In the case of an existing construction, Moore suggested conducting a survey to ensure that the stated size of the lot and the square footage of the home matched the seller’s description. That is another cost factor.

Once the assessment and inspection is complete, buyers are usually overwhelmed with a mountain of paperwork regarding the loan terms, title, and deed. However, despite the challenges and frustrations, local housing experts say there is nothing like the feeling of buying your first home and shopping into the local community at the same time.

“I think we all wish we could reach that level of the American dream, and home ownership is the thing,” said Coleman. “Providing the tools and resources they already have to first-time home buyers will help them achieve this.”

Click here to learn more about the educational resources offered by the Family Services Center. For more information on the Community Action Partnership’s educational resources, click here.

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