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Condo, House or Townhouse: Which Is Best for You?

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The decision to buy a home can be complicated whether you are a first-time homebuyer or are looking for a second home, especially if you are shopping for property in an urban area. What kind of residence can you afford? Should you buy a house in a suburb or a historic downtown? What about a condo within walking distance of a train station? Or a townhouse in a new urban infill community?

Choosing between a townhouse, condominium or house involves questions of location, maintenance, lifestyle and price. These housing styles also have a lot of overlap, so choosing one over the others may involve less sacrifice than you might expect.

What is a condominium?

A condominium, called a “condo” for short, is actually a kind of ownership, while the terms “townhouse” and “house” (a standalone structure most people would think of as a traditional single-family home) refer to physical structure styles.

As such, condos can come in a variety of shapes in sizes, though they are often similar in size and appearance to an apartment. At the same time, some condos can be quite expansive. Condos typically are private residences that are part of a building or multiple-unit communities, although some detached condominiums are available. They are privately owned and occupied by an individual or a family.

Condos comes in many configurations beyond apartment-style buildings, said Mark Swets, executive director of the Association of Condominium, Townhouse, and Homeowners Associations. “Condos have less restrictions,” he said. “They can be converted from old office buildings or loft space.”

Regardless of their location or size, condo owners all share in the ownership of common areas and facilities that are maintained by a board that is comprised of members elected from the condo community. The board collects dues from the community’s condo owners and uses the money to maintain and operate common areas and amenities such a community pool, gym, and landscaping.

Condos often are found in urban areas where land for construction is scarce.

What is a townhouse?

A townhouse typically is a vertical, single-family structure that has at least two floors and shares at least one ground-to-roof wall with a residence next door.

Townhouses, which are individually owned, can be lined up on a row or arranged in a different configuration. Owners buy both the structure, including its interior and exterior, and the piece of land that the townhome is built on, which may include a small yard.

“A townhome is not a kind of ownership, but refers more to the physical structure,” Swets said, referring to the vertical design. “From an ownership perspective, some townhomes are classified as condos while others aren’t. It all depends upon what’s listed in the declaration and bylaws for each association.”

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Should I buy a house, townhouse or condo?

Here are some factors to consider when deciding what kind of residence to buy:

Maintenance

Are you good at home repairs, or do you prefer to have a handyman on speed dial? While a single-family house gives you freedom to fix up or renovate as you please, you also are responsible for all repairs and maintenance. The monthly fee you pay to a board or association if you own a condo may take care of maintenance such as mowing, exterior repairs and snow shoveling. Townhouse homeowners association fees may care of maintenance of the community’s common areas, such as a shared backyard or playground, but it’s not guaranteed.

“If I were to look at a condo, it would be because I didn’t want to worry about the maintenance outside,” said Lori Doerfler, the 2018 president of the Arizona Association of Realtors. “If I wanted to have a piece of land but not a lot of yard, a townhome would be a good choice.”

Location and lifestyle

Condos, townhomes and standalone houses can offer a wide range of lifestyles and locations. Homebuyers should think through whether they’re interested in an urban, walkable lifestyle, a suburban neighborhood, or something in between. Where you live also will determine your commute to work and proximity to family and friends.

Restrictions on ownership

While condos can offer convenience and amenities, they also come with monthly dues, occasional assessment fees for special community projects and property rules, which can be strict. Single-family homes, especially those in neighborhoods without a homeowners association, have few or no restrictions.

Buyers should always check the community’s bylaws to understand the rules.

“I always want to get the covenants, conditions and restrictions to the buyer,” Doerfler said. “They describe the requirements and limitations of what you can do with your home as well as the grounds.”

Monthly fees

Any type of dwelling may come with a monthly fee to help pay for upkeep of the community’s amenities. Owners of a standalone single-family house in a neighborhood with a homeowners association will pay monthly or annual HOA fees, and condo and townhouse owners will pay fees every month to the community board or association.

When factoring your monthly mortgage payment, be sure to add in the HOA or condo association fees to determine how much you’ll pay to live in the dwelling. Fees could significantly increase your cost, putting a seemingly affordable dwelling out of reach.

Lending and price

Where you live will determine the price that you’ll pay for your home. Homes in desirable areas, such as downtowns and good school districts, can cost significantly more that homes with a long commute to a city.

Interest rates also vary by state and by lender, so it’s important to research loan terms from several lenders before making a decision.

Condo vs. townhouse

Benefits: Again, condos and townhouses aren’t mutually exclusive, but their potentially different physical attributes and homeownership structures make them worth comparing in some ways. Both offer less maintenance than a house, the opportunity to get to know neighbors and build a strong community, and walkable amenities such as a pool or community gathering space. Condos may offer a variety of amenities, and with new developments providing over-the-top extras such as rooftop bars, doormen and catering kitchens.

Risks: Condo and HOA fees can be expensive, and you are trusting the HOA or condo association to provide satisfactory upkeep to the property. Condo fees tend to be higher than townhouse HOA fees because condo associations typically provide more maintenance and amenities, and condo associations can enact special assessments to pay for one-time facilities expenses.

House vs. condo

Benefits: While condos offer a range of amenities and maintenance for exterior property, owning a single-family home provides owners with freedom from the rules and restrictions of condominium ownership. Buyers looking for privacy, a rural or suburban lifestyle or a larger property also will have more options with a single-family house.

Risks: Owning a single-family home means that the homeowner must pay for damage and upkeep to the interior and exterior property that isn’t covered by insurance. Condo associations are liable for exterior property and, if stated in the bylaws, “common elements” such as the roof and windows.

Townhouse vs. house

Benefits: Single-family house and townhouse owners both own their entire units, giving them freedom to renovate and change them as they see fit within any guidelines for exterior changes set by HOAs.

Risks: Single-family homeowners assume responsibility for the entirety of their property, which townhome owners may not be liable for repairs, upkeep, or incidents that occur outside of their unit and the land it sits on, depending on their homeowner’s association.

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Which is best for you?

Your decision in buying a home vs. a condo vs. a townhouse should depend on what you can afford, how much maintenance you want to do, where you want to live and the type of community you want to live in. Young families, for example, may want a yard and a house near a good school, while a single professional may be more interested in a downtown condo that is within walking distance to nightlife and the office.

As you consider what kind of dwelling to buy, be sure to include the costs of condo or HOA fees into your budget to be sure that your new home fits your lifestyle and your budget.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Marty Minchin is a writer at MagnifyMoney. You can email Marty here

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Mississippi First-Time Homebuyer Programs

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Intro

New homebuyers looking to buy in Mississippi, home of the moody blues and blooming magnolia trees, may be able to find local assistance programs to help make the purchase possible. These programs target first-time homebuyers by helping with down payments, closing costs and monthly payments.

Mississippi also offers counseling services that cover anything from buying a home to foreclosures, along with educational courses ideal for first-time buyers. If you’re interested in buying in Mississippi and want to learn more about the various programs offered, read on to determine which might be a good fit for you.

Mississippi first-time homebuyer programs

The Mississippi Home Corp. (MHC) offers several programs geared toward helping first-time homebuyers purchase a home. The agency first came about in 1989, with the help of the Mississippi Home Corp. act, to provide affordable and safe housing to its residents. These programs can offer anything from deferred loan payments to tax credits that can help save extra money.

Eligibility for Mississippi assistance

While all of these homebuyer assistance programs have individual eligibility rules and regulations, most tend to look at a few major criteria, such as a homebuyer’s income, credit score, legal residency and previous homeownership.

Smart Solution Mortgage

Smart Solution Mortgage teams up with participating lenders to offer loans with competitive rates and down payment assistance. It also provides its Smart Solution Second, which is geared toward those who need a second mortgage by offering 3.5% down payment.

What is it?

  • A 30-year fixed rate
  • Offers cheaper mortgage insurance premiums
  • Offers the option to combine a Mortgage Credit Certificate (MCC) with the possibility of claiming 40% of mortgage interest (up to $2,000 per year) as credit on federal income taxes and using the rest as a deduction

Requirements

  • Must be the buyer’s primary residence
  • Household income cannot be more than $95,000 per year
  • Must be U.S. resident
  • Minimum credit score of 620 (for Federal Housing Administration [FHA], U.S. Department of Agriculture [USDA] or U.S. Department of Veterans Affairs [VA] loans and conventional loans)
  • The property (new or existing) must be in Mississippi and should be one of the following: single-family home, condominium, townhouse or duplex

MRB 7

Mortgage Revenue Bonds program (or MRB 7) helps ease the burden of coming up with a down payment by providing $7,000 to be put toward it.

What is it?

  • A 30-year fixed rate mortgage
  • The buyer has various loan options (FHA, VA, USDA Rural Development and Fannie Mae/Freddie Mac Loans)
  • No restrictions on liquid assets
  • Offers down payment assistance
  • Also offers a 10-year deferred second mortgage with no interest, which can be forgivable after 10 years

Requirements

  • Must be a first-time homebuyer (not allowed to have owned a residence in the past three years), but veterans and residents in “target areas” such as Pike and Sharkey counties, are exempt.
  • Need to meet credit requirements and loan-underwriting requirements, depending on the specific product.
  • Income level cannot exceed maximum in the county in which you plan to live. For example, Clarke County residents with a household of one or two cannot exceed $52,800 in income, and those with three or more max out at $60,720.
  • Must be a U.S. resident.
  • The property must be in Mississippi and can be either a new or existing single-family home, condominium or townhouse.
  • Purchase price must not exceed maximum for specific county.

Housing Assistance for Teachers (HAT)

The Housing Assistance for Teachers Program (HAT) offers homebuying assistance to teachers who want to live in rural Mississippi, where there is a shortage of educators.

What is it?

  • A 25- or 30-year fixed-rate loan that provides up to $6,000 toward closing costs
  • Offers down payment assistance
  • Has no income limits (except when pairing HAT with another MHC loan)

Requirements

  • Must be a teacher for three years in a school district with a shortage of educators.
  • Must meet certain credit requirements.
  • Required to pay at least 1% of the property price for the down payment along with one month’s reserves.
  • The property location needs to be within an eligible county, such as Bolivar or Marshall. Loan-to-value ratio (LTV) cannot be more than 97%.
  • Must have an acceptable credit score (required credit score varies depending on LTV).
  • Must have mortgage insurance, depending on LTV.

Mortgage Credit Certificate (MCC)

The Mortgage Credit Certificate (MCC) can provide a tax credit up to 40% of the loan’s annual interest (actual amount depends on interest already paid), allowing for a possible 60% to be used as a deduction.

What is it?

  • A tax credit of up to 40%
  • The credit can be combined with MHC’s other programs and various loan products (conventional, FHA, VA and RD financing)

Requirements

  • Must be a first-time homebuyer (those in “target areas,” including Benton and Copiah, are exempt).
  • Can’t exceed household income limits, which vary by county. Clay County, for example, cannot exceed $63,360 for a household of one to two, or $73,920 for three or more.
  • The tax credit cannot be more than $2,000 per year.
  • Must live in a single-family home as permanent residence, and all manufactured homes need to be approved by the U.S. Department of Housing and Urban Development (HUD)
  • Purchase price must not exceed limits for specific county.
  • Must pay a $300 non-refundable reservation fee.
  • Must provide property sales contract and federal income tax returns (from the last three years).
  • Must complete a homebuyer education course.

How to apply

To apply for any of the homebuyer assistance programs with the Mississippi Home Corp., you will need to work with a participating lender. You can start this process by searching the agency’s website for a participating lender and reach out to them directly.

These lenders will be able to match you with the specific program(s) that work best for your needs, depending on your financial profile and credit history. Your income and credit score will be considered, along with the county where you are looking to purchase your new home.

National first-time homebuyer programs

Mississippi has many different programs that can come in handy when you’re looking to buy your first home there. However, the state may not have the perfect program that works for you. If that is the case, you may want to look into other programs that are available nationwide. Some of these programs include the USDA Rural Development program targeting lower-income residents who want to buy a home in a specified rural area, along with Habitat for Humanity, the FHA and the VA. Learn more about these programs by checking out LendingTree’s general guide to first-time homebuyer programs. LendingTree owns MagnifyMoney.

This article contains links to LendingTree, our parent company.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Carissa Chesanek
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Kansas First-Time Homebuyer Programs

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

If you’re drawn to midwestern friendliness, wide open spaces and affordable homes, there’s no place like Kansas to settle down. And if you need help coming up with a down payment on your first home, or you want to keep your mortgage affordable, the state may have a program for you.

The Sunflower State offers one first-time homebuyer program that provides assistance with your down payment and other homebuying costs in the form of a forgivable loan. And to help increase the number of homebuying assistance options, two Kansas counties joined to create another statewide program open to first-time homebuyers. Because the state has fewer programs than many other states, Kansans might also want to look at federal and local first-time homebuyer programs to increase the chances of finding a program that fits their needs.

In January 2019, we researched first-time homebuyer programs in Kansas. This included reviewing the Kansas Housing Resources Corporation website and other state resources. We put together the information you need to know in this guide.

Kansas first-time homebuyer programs

The first program on our list is offered through the Kansas Housing Resources Corporation (KHRC), a public corporation that runs housing programs in Kansas. The mission of the KHRC is to increase the availability of affordable, quality housing for Kansas residents. The organization oversees more than 25 affordable housing programs, one of which is designed to help first-time homebuyers.

Another statewide program open to first-time homebuyers is sponsored by two Kansas counties, Sedgewick and Shawnee. The program offers grants of up to 5% of a home’s purchase price to help with closing costs and down payment, along with extra subsidies for very low-income homebuyers. The program also now offers a zero-interest second mortgage that is forgivable after one year for homebuyers who qualify.

Requirements for Kansas assistance

Homebuyers who want to use a Kansas first-time homebuyer program must have a household income that falls within program requirements and must be buying a home within an eligible area in the state.

First Time Homebuyer Program

The First Time Homebuyer Program (FTHB) from the state of Kansas offers assistance with down payments, closing costs and legal fees to help first-time homebuyers who meet income requirements. Homebuyers who stay in their home for 10 years or longer may not have to repay any of the funds they receive.

What is it?

The First Time Homebuyer Program offers

  • A subsidy divided into two equal parts: a loan that may be forgiven over five years if the amount is under $15,000 or 10 years if it is $15,000 or more, and a loan that must be repaid on the sale of the house only if the house is sold within 10 years of the date of purchase.
  • A loan for 15% to 20% of the total purchase price of the home, depending on the homebuyer’s income.

Requirements

In order to be eligible to participate in the First Time Homebuyer Program, you must

  • Have not owned a home in the past three years OR be either a manufactured home owner, a single parent or a displaced homemaker. A displaced homemaker is defined as someone who has worked mainly in the home without pay and is experiencing difficulty finding paid employment.
  • Have income at or below 80% of the area median income (AMI).
  • Not be buying within the city limits of Kansas City, Lawrence, Topeka or Wichita.
  • Not be buying within the limits of Johnson County, which includes the cities of Olathe and Overland Park.
  • Put down the greater of 2% of the purchase price or $500 with your own funds.
  • Live in the purchased home as your primary residence.

How to apply

To apply for the First Time Homebuyer program in Kansas, you’ll need to contact a KHRC-approved lender that participates in the program. The lender you choose will ask questions to determine whether you qualify for the First Time Homebuyer Program and will walk you through the application process.

If you’re planning to buy in one of the top six largest cities in Kansas that are excluded from the program, you may want to check to see if the local government offers a first-time homebuyer program. For example, the City of Wichita offers the HOMEOwnership 80 program for first-time homebuyers buying in certain areas, and Topeka offers the Topeka Opportunity to Own (TOTO) program for first-time homebuyers.

Learn more

Kansas Housing Assistance Program

The Kansas Housing Assistance Program (KHAP) was created by two Kansas counties, but residents across the state can take advantage of it. It’s available to first-time and repeat homebuyers with low or modest incomes. In addition to a 30-year mortgage, it offers a grant to help with home down payment or closing costs. A new enhancement to the program (see Kansas Kick Start below) also offers a forgivable second mortgage to qualifying first-time homebuyers.

What is it?

The Kansas Housing Assistance Program offers

  • A 30-year fixed rate mortgage
  • A grant of up to 5% of the home purchase price to help with closing costs or a down payment on the home. Grant percentage varies based on whether you get a conventional loan (up to 5%), FHA loan (4%), USDA loan (2%), or VA mortgage (2%).
  • An extra subsidy on conventional loans of up to $1,500 (for buyers who are above 50% but below 80% of the area median income [AMI]) or $2,500 (for buyers below 50% of the AMI).

Requirements

You do not need to be a first-time homebuyer to qualify for KHAP. However, you must

  • Have a credit score of at least 640 (for conventional, VA and USDA loans) or at least 660 (for FHA loans).
  • Buy either a detached single-family home, a condo, a townhome or a duplex (with one unit occupied by you).
  • Meet income limits that vary based on the location of your home and the type of mortgage.
  • Be buying a home priced at $453,100 or less.

How to apply

To get started with KHAP, contact a participating lender. The lender will ask questions to determine whether you qualify and will help you apply for the program. Find a lender on the KHAP list of lenders.

Kansas Kick Start

Kansas Kick Start is a new offer that is part of the Kansas Housing Assistance Program and can provide additional funds to first-time homebuyers. It offers a flat sum as a forgivable second mortgage.

What is it?

The Kansas Kick Start enhancement to the KHAP program offers

  • A flat amount of $7,000 as a zero-interest second mortgage that is forgivable in one year.
  • The option to be used along with a 1% or 2% KHAP grant.
  • The option be “stacked” with other funding sources.

Requirements

To qualify for Kansas Kick Start, you must

  • Be a first-time homebuyer.
  • Use a conventional loan to purchase your home.
  • Meet Kansas Kick Start income requirements, which vary based on location and household size.
  • Be buying a home that meets Kansas Kick Start home price limits.
  • Complete a homebuyer education course.
  • Have a credit score of 640 or higher for Freddie Mac HFA Advantage loan.
  • Be buying a single-family property.

How to apply

As mentioned under the Kansas Housing Assistance Program, you must go through a participating lender. To get started, check the KHAP list of lenders.

National first-time homebuyer programs

Many states offer a variety of first-time homebuyer programs to allow homebuyers to find a program that fits. Because Kansas offers only one program specifically targeted at first-time homebuyers, Sunflower State buyers might want to expand their options by looking at federal first-time homebuyer programs. If you’d like to see what federal programs are open to you, check out LendingTree’s guide to first-time homebuyer programs before you go looking for your dream home. (LendingTree owns MagnifyMoney.)

This article contains links to LendingTree, our parent company.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Allie Johnson
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Allie Johnson is a writer at MagnifyMoney. You can email Allie here

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