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The “American Dream” of homeownership is supported by federal programs that either insure loans made by lenders (such as FHA, VA, and USDA) or purchase loans from lenders to package them into mortgage-backed securities (like Fannie Mae and Freddie Mac).

Loans that meet the standards set by Fannie Mae and Freddie Mac are called conforming loans, and can only be used for borrower-occupied, single-family homes up to four units.

FHA conforming loan qualifications include:

• FICO® score at least 580 = 3.5% down payment.
• FICO® score between 500 and 579 = 10% down payment.
• MIP (Mortgage Insurance Premium) is required.
• Debt-to-Income Ratio < 43%.
• The home must be the borrower’s primary residence.
• Borrower must have steady income and proof of employment.

VA loans require a Certificate of Eligibility, but require low or no down-payments. USDA loans also require no money down and are only eligible for qualifying rural homes.

Conventional loans are not government-insured. Borrowers must have 620 or higher credit scores.

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According to the U.S. Department of Housing and Urban Development (HUD), affordable housing means that you should be paying no more than 30% of your gross income for housing costs, including mortgage principle and interest, property taxes, home insurance premiums, and utilities. In reality, home ownership costs much more when HOA fees, maintenance, and repairs are included.

You can avoid becoming over-extended by taking the following steps:

Buy below your means. Your lender will qualify you for the maximum you can afford, so be wise and buy a less expensive, smaller home. Use the difference for savings and investments. You can always move later.

Plan for rising costs. Property taxes are based on sales prices, so you’ll only pay the seller’s rate until the next assessment which will be much higher next year. Home insurance, utilities, etc.  will rise in cost most years.

Plan for the long-term. It takes time to build equity in real estate. When you buy a home, plan to live there for at least seven years, then rent it out.

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Accessory dwelling units (ADUs) are small stand-alone or attached homes built on lots occupied by larger single-family homes. Also known as granny flats, ADUs can allow aging parents to live close to family or give adult children a chance to save money to launch their lives. They can also be rented to small households for additional income.

ADUs can expand density in already-built neighborhoods replete with utilities, streets, schools, hospitals, etc., and there are those who resist ADUs for short-term rentals, due to more noise, traffic, people moving in and out, and, possibly, lower home values if ADUs don’t integrate well esthetically within the neighborhood. Fortunately, the opposite has proven true—ADUs can improve home values by as much as 35% in big cities.

Instead of restricting ADUs, a better idea is to improve zoning which limits the size (400 sq. ft. to 1,000 sq. ft.) and placement of units on a property. Other provisions can include design standards, minimum lot sizes, limits on the number of occupants, and off-street parking for vehicles.

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Slang in popular culture often has confusing meanings. Bougie (boo-zhee) and Boujee (boo-ghee), for example, are both adjective derivatives of the French noun bourgeoisie, which means “of middle-class status.” A bougie person may flaunt expensive tastes to elevate their social and financial status, while a boujee person is wealthy but unpretentious, according to hip-hop culture.

If you own or aspire to buy a middle-class home, here are three ways to give it the bougie-boujee refinement you desire. Focus on serenity, privacy, and comfort.

Serenity. The finest homes are decorated in calming neutrals, but instead of grays and beiges, try a subtle pink like Sherwin-Williams’ Fancy Pink or Benjamin Moore’s Fruited Plains.

Privacy. Create privacy without the heaviness of window drapes or the flimsiness of blinds. Plantation shutters are high end and, as attachments, add value to the home when you sell one day.

Comfort. High-quality insulation can prevent drafts, lower utility bills, and dampen noise. Decluttering can eliminate the feeling of being crowded. Ottomans can provide recliner-like comfort with better style and versatility.

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To buy a home in spring 2025, you should organize your finances, choose the right team members, and understand the market.

Check your credit history and scores for free at Annualcreditreport.com. Look for any mistakes, liens or unpaid balances and get proof that you’ve resolved the issue. Determine sources to help you make a down payment, including savings, gifts, and grants.

Your team. Your real estate agent should be part of a vast network of contacts and have expertise in the neighborhood and the type of home you want to buy, such as a condominium or high-rise apartment. Your lender should offer a range of loan products that will fit your unique financial situation, whether you’re self-employed, an investor, or a co-borrower.

The market. Your agent will help you understand the market by showing you reports on housing prices, days on market, price reductions, and so on. This will help you choose the best neighborhood and home in your price range, replete with the services, transportation and other amenities you’ll need.

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Real estate agency is a legally binding relationship between real estate agents and their clients during the buying and selling process. Each state has its own rules regarding the licensing and duties of real estate professionals, as well as how they’re allowed to work with consumers.

First, there are two levels of licensure—broker and agent. Brokers can own their own agencies and work independently, while agents must work under a broker’s supervision. When you hire an agent, you’re really hiring the broker.

Because brokers and agents can represent either or both parties to a real estate transaction, agency relationships must be disclosed to both the seller and the homebuyer. In most states, dual agency isn’t permitted, but a broker may assign another agent in the firm to represent one of the parties as a designated agent with limited fiduciary obligations.

In some regions, new industry rules or existing state laws may require homebuyers to sign temporary or long-term representation contracts with a buyer’s agent before they can begin touring homes. The contents of these agreements vary depending on the location of the property and other factors; consult with a local broker or sales professional for more specifics.

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If you really need to sell your home, you don’t have to wait until after the holidays. While there are fewer homebuyers, those actively searching are often committed to making a swift move due to reasons such as lease endings, job relocations, or military transfers.

You can make your home stand out in several ways:

Price it right. A lower price will excite buyers, but only accept a fair offer.

Clean and declutter. For a few hundred dollars, a cleaning crew will make your home look spotless. Pack away anything you don’t need in moving boxes and store them in a seldom-used room.

Keep holiday decor simple. String lights and evergreen branches. Skip the big tree and place a small one on a tabletop instead. Bake cookies and serve cinnamon cider for showings.

Prioritize the exterior. Make sure leaves are picked up, snow is shoveled, and walkways are safely de-iced.

Let someone else host dinners and parties. You can still enjoy holiday festivities without doing all the cooking and planning yourself. Friends and relatives will understand.

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When you apply for a mortgage loan, you’ll receive a standardized form called a loan estimate within three working days. The purpose is to give you the opportunity to compare multiple offers from lenders and to negotiate terms where applicable. Once you choose a lender, this pre-approval allows you to shop for a home with confidence, but keep in mind that the loan estimate is not a final approval, nor does it mean you’re locked into the loan.

A loan estimate is exactly that—an estimate of the interest rate, monthly mortgage payments, fees, closing costs and the cash needed to close. The reason that the estimate isn’t final is that things change. The loan can’t go through the lender’s underwriting until you’ve put a contract on a home with a closing date. Underwriting examines your credit more thoroughly and ensures that the home you’re buying, the loan and its terms meet government lending guidelines.

Once approved, your lender will prepare your final closing documents three days before close of escrow.

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If you’re planning to buy a home in a community managed by a homeowners association (HOA), you’ll need to join, pay fees, and adhere to the association’s rules as a member. Your purchase contract should include a contingency that gives you the right to review the HOA’s financial records and its covenants, conditions, and restrictions (CC&Rs) so you’ll know whether the HOA is in good financial health and has sensible rules and regulations.

Be on the lookout for the following:

High monthly dues: HOA fees can affect your mortgage qualification by reducing the amount you can borrow. Only consider properties with amenities you’ll genuinely use to avoid unnecessary costs.

Not enough reserves: Reserves are fees set aside for future maintenance, but if the HOA doesn’t charge enough in fees, you may be hit with “special assessments” to cover unplanned costs. Look at how and when reserve monies will be used.

Too many regulations: Rules should only address personal safety, home values and the HOA’s financial health—not limit front doors to three bland paint choices.

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Rising home prices and borrowing costs are making large homes less affordable, leading to a trend of smaller new homes. After years of increasing sizes, buyers might need to adjust to homes with less square footage and fewer rooms—but this shift could be beneficial.

For the first time, new homes are cheaper than pre-owned homes by $3.50 per square foot. Not only would you save money, but you won’t have remodeling costs for years to come, not to mention that the home will be move-in ready.

Other good news is that more homes are being built in the affordable range between $200,000 and $350,000 which is saying a lot, considering that the latest national median home price was $439,950 in July 2024. According to the U.S. Census Bureau, new single-family homes had a median 2,140 sq. ft. in Q1-2024—that’s 116 square feet smaller than the median new home size in 2023.

Smaller homes also offer economic benefits, including lower utility and insurance costs, as well as easier maintenance.

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