Randy Morrow is a Certified Real Estate Divorce Specialist in Virginia. Ron and Robert recently interviewed him on their podcast, Ron and Robert on Divorce on iTunes. Check out the first two interviews in the four part series here and here. Part 3 is available on iTunes now and we’ll post it on our blog this Friday. Subscribe to our free weekly podcast here.
MULTIPLE SOURCES FOR PURCHASING A HOME AFTER DIVORCE
By Randy Morrow
One of the dismal aspects of going through a divorce is the thought that you will not be able to buy another home. In many cases that is correct. However, if you are able to remove yourself from the tunnel-vision effect, there are a great many resources available.
What do I mean? When we are thinking of buying another home, we immediately think of traditional loans at traditional institutions. Also, we think about the massive amounts of cash needed. For those willing to do some research, allow me to make a few suggestions on where to search.
- National.
Traditional institutions such as banks and mortgage companies. We are all aware of them.
- State.
Many states have programs to provide below market mortgages for eligible low- and moderate-income first time homebuyers. Most require that you currently live in the state and/or county. There are income limits and purchase price limits. Conventional, FHA, and VA loans may be available. These programs are traditionally re-funded yearly with a set amount of funds. This means they may run out of money before the end of their twelve month period.
- County/City.
Here is an example of the property eligibility of a city-run program:
- Property must be located in that city/county
- Eligible Property Types: Single-Family (detached, duplex, townhomes)
Multi-Family (condominiums, cooperatives)
- Maximum purchase price: $362,790
- Maximum loan amount: $90,700
- Minimum down payment: 1% of the purchase price.
- County/City Work Programs.
One program I’m aware of provides up to a $5,000 “forgivable loan” for eligible employees to purchase in this locale.
- Owner occupancy is required.
- There are no income requirements or limitations.
- Property must be located in the county/city
- At least one member of the family must be a permanent full-time employee.
- The loan is “forgivable”, meaning if the employee remains employed with the County or City for three years (and the property remains owner-occupied), the loan will become a grant.
- Notification Lists.
Check to see if your locale has a ‘lottery’ system. These are properties made available to qualified low and moderate income households, as well as the allocation of down payment and closing cost assistance. If a lottery system is available and you qualify, your name will be placed on a notification list. This list can be quite lengthy, but do not be discouraged. A lot of things happen to a lot of the people ahead of you on the list; they move out of town or out of state, their financial situation improves, they die, et cetera.
Naturally, everything I’ve written about here may not be applicable where you live. My point is to encourage you to avoid ‘tunnel-vision’. Do not think that there is only one way for you to own a place of your own if your divorce leaves you a bit down. Keep an open mind, get curious, do some research, and start rebuilding your life.
Randy Morrow, Realtor and Virginia’s Leading Certified Real Estate Divorce Specialist.
