Choosing to live in London or Las Vegas? These homeownership schemes might just seal the deal for you.
Finding somewhere to live is an absolute minefield, and it doesn’t help that homeownership is so expensive it feels almost impossible to get there. Las Vegas and London both have various government incentives to help low-income families and first-time buyers onto the ladder. The question is, which has the best options?
Getting a shared ownership conveyancing quote for a home in the United Kingdom is one place to start, but there are actually plenty of other homeownership options to consider too. Similarly, Las Vegas in Nevada has both the “Home is Possible” and “Home at Last” scheme.
In this article, we’ll be exploring the various schemes a bit further to help you understand your options. Maybe it’ll make your choice of the city that much easier.
Home Ownership Schemes in the UK
The UK, including London, has a huge variety of homeownership schemes mainly tailored towards first-time buyers. The main ones include:
Shared Ownership Scheme
The shared ownership scheme allows first-time buyers to buy a share of their home from the landlord (usually the council or a housing association) and pay rent on the remaining share. The scheme requires a 1/4 to 1/3 mortgage to be taken out, allowing you to then pay a reduced rent on the rest of the property.
Larger shares of the property can be purchased later on, but it ultimately allows young people to start building equity when they might not be able to afford a home otherwise.
First Homes Scheme
The June 2021 First Homes scheme allows first-time buyers to save up to 30 percent when buying a new-build home. After the 30 percent discount, homes can be sold for a maximum of £250,000, or £420,000 in London.
First-time buyers with household earnings under £80,000 are eligible. At least a 50 percent mortgage is required to join the scheme, and the high loan-to-value loans being offered at the moment luckily meet these requirements.
Help to Buy Equity Loan Scheme
Only available in England and Wales, the Help to Buy scheme allows first-time buyers to buy a new build house with as little as a five percent deposit. The rest of the 20 percent deposit is provided as an interest-free equity loan. The loan is interest-free for the first five years, after which interest must be paid on the amount you borrowed.
Lifetime Individual Savings Account (LISA)
LISAs allow you to save up to £4,000 a year until you’re 50, with a government grant of 25 percent of the total savings added when the account is used to buy a house.
Right to Buy Scheme
For council house or housing association tenants living in England or Northern Ireland, the Right to Buy Scheme is ideal. It allows you to buy the property at a discount if you fall under the following categories:
- You’ve been a council or public sector tenant for three years.
- The home will be your primary home.
- The property is self-contained, so it won’t be a house share.
- The landlord of the home currently is the housing association, council, NHS trust or other public sector landlord.
Depending on where you live, the maximum right to buy a discount varies. For those in London it is £112,300, whereas in the rest of England it is £84,200, and it’s just £24,000 in Northern Ireland. If you sell the property within five years, you’ll have to pay back some or all of this discount, plus a share of any profit.
Home Ownership Schemes in Nevada
Home ownership in Nevada is also made possible with a variety of programs tailored mainly to low-income families and veterans. Some of these various programs include:
Home is Possible
The Home is Possible program was established in 2014 across the whole state of Nevada to help low-income and working families get on the property ladder. It grants budding homeowners up to five percent of the loan value for a one-time fee of $755 paid at closing. The money can then be used for the down payment or closing costs of the house.
The program assists households who earn less than $98,500 a year, and want to buy a home that costs less than $548,250. For veterans or active military personnel, a fixed interest rate may also be possible. Alternatively, on September 30, 2021, licensed Nevada teachers can even secure $7,500 to help them buy a house.
The program doesn’t just guarantee support for first-time buyers, but also second and third, etc. time buyers. As long as the borrower doesn’t own a house already at the time of completion, they may be eligible. They must also have a credit score of over 640 to qualify and be planning to live in their new home as their primary residence.
For more information about the various options available, visit the Home is Possible program website to get to know the landscape better.
Federal Home Loan Bank of San Francisco WISH / IDEA Programs
Every year, the bank can apply for WISH and IDEA funds to grant low to moderate income families in Arizona and Nevada funds to get themselves on the property ladder. The grant awards those who are actively seeking home ownership, offering a 4-to-1 contribution match.
In 2016 alone, the bank was awarded $4,000,000 in down payment assistance which went towards home seekers. For more information about eligibility and finances for this scheme, click here.
Rural Nevada Development Corporation Down Payment Assistance
This program is for low income, first-time buyers living in rural Nevada. It assists them with between $10,000 or $15,000 for a down payment on residential properties that meet HUD Housing Quality Standards. The amount of money provided depends on household income and the size of the household.
Closing costs are also part of this assistance scheme, and may cover:
- Loan origination fees
- Credit report fees
- Escrow fees
- Title charges
- Document preparation
- Inspection costs.
Home at Last
In 2006, the Home at Last program was launched by the Nevada Rural Housing Authority to help expand homeownership opportunities in rural areas. It provides down payment assistance options from 0 to five percent of the loan amount up to $27,000.
Mortgage Credit Certificate Program
As part of the Home at Last scheme, the Mortgage Credit Certificate (MCC) program provides first-time buyers and veterans with an annual federal income tax credit equal to 30 percent of the mortgage interest paid for those eligible. The fund goes up to a maximum annual fee of $2,000 each year for the life of the loan.
Combining the down payment assistance with the MCC can help homeowners save even more money.
London or Las Vegas Home Ownership: Which is Better?
As you can see, there are various government schemes available in both London and Las Vegas. It’s clear to see that the biggest difference between the UK and Nevada is the priorities. For the UK, first-time buyers seem to be the main focus, whereas it’s low-income families and veterans in Nevada.
Based on the culture and property market in these various places, it comes as no surprise that these priorities are so different. So, depending on where you currently live, and your situation in terms of homeownership, neither is better – only different.
Have you had any experience in buying a home in Nevada or London? Perhaps you have experience with both and can provide a real-life view on the subject? Be sure to leave your thoughts in the comments down below.
Please be advised that this article is for general informational purposes only, and should not be used as a substitute for advice from a trained financial professional. Be sure to consult a financial professional if you’re seeking homeownership advice. We are not liable for risks or issues associated with using or acting upon the information on this site.