First-time buyers, Lafayette Parish
Your first house in Lafayette, without the parts nobody explains.
Nobody is born knowing what an escrow account is. This is the whole thing written out in order, with the Louisiana parts that national guides get wrong.
Where the down payment comes from
Four routes, two of them zero down
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USDA
Zero down, if the address qualifies
A rural development loan with no down payment. The eligible area covers a great deal of Lafayette Parish outside the city limits, which is the part people do not expect. Check the specific address, because the map moves.
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VA
Zero down, for those who qualify
No down payment, no monthly mortgage insurance, and a funding fee that can be financed. If you are eligible this is usually the strongest loan available to you.
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FHA
Low down, more forgiving credit
Commonly three and a half percent down with credit standards that are easier than conventional. The tradeoff is mortgage insurance that now generally stays for the life of the loan.
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LHC
State assistance on top
The Louisiana Housing Corporation pairs a mortgage with help toward the down payment and closing costs, inside income and price limits. Programs open and close, so ask what is live this month.
Closing costs, honestly
What is actually due at the table
- Down payment
- Zero to three and a half percent for most first-time buyers here, depending on the program.
- Lender charges
- Origination, underwriting, and any points you agreed to. All of it is itemized on the loan estimate.
- Title and the notarial act
- Title examination, title insurance, and the closing itself, which in Louisiana is passed before a notary with two witnesses.
- Appraisal and inspections
- The appraisal is for the lender. The inspection and the termite report are for you, and you pay for them before closing.
- Insurance, paid a year ahead
- A full year of homeowner's coverage up front, plus flood if the property is in a special flood hazard area.
- Escrow to start the account
- Several months of taxes and insurance collected at closing so the account has a balance.
Ask for the total cash to close as a single figure and plan against that. Any range quoted on a website is a national average and will not describe your loan.
What the inspection finds
Older Lafayette housing stock, and what it hides
A lot of the affordable inventory around Lafayette was built between the 1950s and the 1980s. Those are frequently good houses. They also have a predictable set of issues, and knowing them in advance turns an alarming inspection report into a shopping list.
- Roof age.
- This is the one that decides whether you can get an affordable insurance policy at all, so ask the age before you make the offer, not after.
- Slab movement.
- Gulf coast clay soils shrink and swell, and hairline cracks are common. What matters is whether doors still close and whether the cracking is progressive.
- Ductwork in an unconditioned attic.
- Old flexible duct in a Louisiana attic loses a lot of what the air conditioner makes.
- Electrical panels.
- Several older panel brands are no longer accepted by insurers, and replacing one is a known, priceable job.
- Drainage.
- Ground that falls toward the house instead of away from it is behind a surprising share of water complaints that get blamed on flooding.
- Termites.
- Formosan termites are established in south Louisiana. A wood-destroying insect report is not a formality here and an active infestation is a negotiation, not a deal breaker.
None of that is a reason to avoid an older house. It is a reason to price the first three years of ownership honestly before you sign.
The thing to check first
Get the insurance quote during the inspection period
The mistake first-time buyers make in this parish is treating insurance as paperwork that happens near closing. Premiums here have moved a long way, roof age is now a central underwriting question, and a quote that comes back at double what you assumed changes what you can afford.
Check the flood zone on the specific address. In a special flood hazard area a federally backed lender will require flood insurance, and an elevation certificate can move that premium a lot. In zone X nothing is required, and the 2016 flood put water in a great many zone X houses in this parish, so ask what the preferred risk premium costs anyway. It is usually the cheapest peace of mind on the list.
First-time questions
First-time questions, answered plainly
Do I really need twenty percent down?
No, and almost nobody buying a first house in Lafayette Parish does. FHA is commonly three and a half percent down. Conventional programs go to three percent for qualified first-time buyers. USDA is zero down inside the eligible area, and VA is zero down for those who qualify. Twenty percent avoids mortgage insurance, which is a real saving and not a requirement.
How do I know if an address qualifies for USDA?
Check the specific address on the USDA eligibility map rather than assuming from the town name. Large parts of Lafayette Parish outside the city limits sit inside the eligible area, which surprises people who think of USDA as a farm loan. The map is redrawn periodically and growth has moved parts of it, so check the address you are actually buying.
What down payment assistance exists in Louisiana?
The Louisiana Housing Corporation runs the state programs, which typically pair a mortgage with assistance toward the down payment and closing costs, with income and purchase price limits. Which programs are open, and what the limits are, changes through the year. Ask a lender who does LHC loans regularly which ones are open in the month you are applying, because the answer has a shelf life.
What is the real cost at the closing table?
Down payment, plus closing costs, plus a full year of homeowner's insurance paid up front, plus the escrow the lender collects to start the account, plus flood insurance if the property requires it. In Louisiana the closing is a notarial act, and title work, title insurance, the appraisal and recording fees all sit in there. Ask your lender for the total cash to close as one number and plan against that, not against the down payment.
Should I waive the inspection to win the house?
On your first house, no. An inspection on an older Lafayette house routinely turns up roof age, slab movement, ductwork, electrical panels insurers no longer accept, and termites. Those are the items that decide whether the house is affordable to own, not just to buy. Winning a bidding war by giving up the right to find out is not winning.
Start anywhere
No question here is too basic
Everybody buying a first house has three of those. Answering them is the least expensive part of this for everyone involved.
Programs and sources
Where the money actually comes from
Every claim on this page can be checked against a public source. These are the ones it rests on.
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Down payment help
The state agency behind down payment assistance and the mortgage programs that go with it.
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USDA loan eligibility
Much of Lafayette Parish outside the city limits sits inside the eligible area, a zero down payment loan most buyers never check for.
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The CFPB
Plain-language guidance on loan estimates, closing disclosures, and what a servicer must do when a borrower asks for help.
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FEMA flood maps
The current flood zone for a specific address, from the source. Zones vary lot by lot and the maps are revised.
Related
Where to go next
The pages most people read after this one.
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Buying in Acadiana
Representation, flood zones, insurance, and the process through to the act of sale.
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Relocating here
What to settle about insurance and flood before you shortlist an area.
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A REALTOR® in Carencro
More house per dollar, and what comes with it.
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Areas served
Lafayette Parish and the parishes around it, town by town.