Wednesday, May 31, 2023
Utah will give you $20K to buy a new home, but good luck finding one
Urban Living
Posted By Babs De Lay on May 31, 2023, 4:00 AM
Back in February, the state of Utah ended its COVID-19 Emergency Rental Assistance program that was funded by the feds to the tune of more than $350 million. In the past several years, rents have gone up substantially here, with Salt Lake County rents hiking 37%, Davis County up 42% and Weber County by just over 18%.
My friend is a property manager for landlords and told me that Utah is the only state in the nation where you get an eviction notice with only 3 days notice to move out—or suffer terrible damages and court fees tacked onto what you owe in back rent. And being evicted can be a nail in your coffin when trying to get a new home loan.
It's highly unlikely that your landlord will write a letter to your mortgage broker saying you're a great tenant and always paid on time. But know that most lenders, especially local mortgage brokers, can help you repair your credit for free to get you into a home.
This July, the Utah Housing Corporation will be overseeing the new $20,000 grants for first-time homebuyers that our Legislature put into place this past winter. It's funded from the huge tax surplus sitting in the state's coffers, with $50 million allocated to fund—hopefully—2,500 buyers in the state.
This sounds great, right? Three things to know: first, you must buy something newly built that will cost no more than $450,000; second, if you're already under contract for a new home, townhome or condo, you can still qualify to get the $20,000; and lastly, you cannot have owned (or your spouse) any principal residence in the past three years.
Sounds reasonable, right? Well good freakin' luck finding much along the Wasatch Front for less than $450,000! Developers are not building condos, they're building apartments. And homes in that price range are still getting multiple offers and going under contract in a day or two.
Basically, if you want to find new construction for under $450,000, you're going to have to look in the suburbs and rural Utah. I know, as I've been trying to find a decent home for clients for the past two months and all we keep running into is fixer uppers or flippers who skimped on work in favor of profit.
Realtor.com recently reported that Americans have increased their down payment amounts across the country, with a peak of 14.1% in 2022 and lowering slightly in the first quarter of this year to 13%. There is no rule for how much down payment a buyer must put down, except for what the lender requires for you to get a particular loan.
I've written contracts over the years with buyers who were offering no down payment because they knew the seller. Veterans and folks in active military duty can get zero-down loans, and FHA loans typically require low down payments.
About The Author
Babs De Lay
A full-time broker/owner of Urban Utah Homes and Estates, Babs De Lay serves on the Salt Lake City Historic Landmark Commission. A writer and golfer, you'll find them working as a staff guardian at the Temple at Burning Man each year.
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