Your Guide to Buying a Home in Nebraska

The Nebraska Buying Process: A Summary

• For Nebraska purchases, the transaction can be closed by an attorney, title company, or real estate agent.
• In the state, buyers and sellers often split escrow and closing costs, while sellers generally pay the state fees for documenting the sale. 
• Although you and the lender have come to an agreement on price, there are still negotiations that need to be worked out.
• To make the mortgage loan official, you’ll need to provide a variety of documents to the lender. 
• You (the buyer) and the seller will meet together at the same table to finalize the closing.
• The entire state of Nebraska is under the base limit for conforming loans, which is currently $647,200 for a single-family home. 

Buying a Home in Nebraska, Phase 1: Post-Contract Negotiations

After searching for a home, you and the seller will come to an agreement on price. You might think that most of the work is done, but the process is not over yet. First, you have a few details to complete. 

1. After reaching an agreement, you and the seller will sign a purchase contract. 
2. At the same time, you will deliver a payment called “earnest money,” which is held in escrow. 
3. The signed contract is sent to a title company or an attorney. This will launch the process for transferring the title to a new owner. This should be done as early as possible in case there are any complications. 
4. You will now review and sign off on any disclosures from the seller. These are statements of known issues with the home, and you’ll need to review them thoroughly. This is a mandatory step that the seller must complete with sincere honesty.
5. If the home was built before 1978, you will need to have an inspection for lead paint. The seller also need to disclose if they have any knowledge of lead paint in the home.
6. You now have the chance to complete inspections. The type of inspection you need will vary, but most will want to complete a general inspection, as well as inspections for certain pests, such as termites. Termite inspections are generally requested for Nebraska home purchases.
7. Based on the outcome of the inspections, you have a few options. If any problems are discovered, you can request a change in the purchase price or ask that the issues are addressed before the sale. The seller can offer a negotiated solution and the buyer can respond in kind until an agreement is reached. 
8. You can negotiate a home warranty with the seller. This is to cover the costs of appliance repair or replacement for roughly a year.

Phase 2: The Mortgage Process

You were likely pre-qualified for a mortgage before shopping for a home. Now, you’ll need to go through the process to make your mortgage official. 

1. First, you will need to make an official application, either on your own or with the help of a qualified mortgage professional. 
2. The lender will send a good faith estimate, which is a calculation, to their best ability, of your final closing costs. 
3. Before they can write a loan, you’ll need to provide a variety of documents, including…

• Pay stubs for at least two weeks.
• Tax returns for the following two years. 
• Bank statements for all accounts you own. 
• Loan documents on all debts, including car loans and student debt. 
• Financial disclosures that impact your income, such as alimony or child support. (Include this information whether you pay or receive the money.) 
• Explanation on any recent credit inquiries.
• Information on any large deposits outside of your normal income.
• A gift letter if you will be using a gift for your downpayment. 
• Repeat or updated information on any of the above. 

4. The lender will eventually issue a decision. Assuming you are approved, you will receive a loan commitment letter, stating their willingness to support your purchase. The commitment will likely have contingencies, including the need for a home appraisal. 

5. If you are unable to get loan approval, you can request an extension, allowing for more time to secure a loan before the contract expires. 

6. An appraisal will be ordered. This is to make sure the home has a strong value, and will impact your loan. If the appraisal is low, changes to the purchase price or a larger downpayment may be needed. If the appraisal is high enough, the purchase can more forward.

7. You will eventually need homeowners’ insurance, and proof of this insurance should be given to the lender.

8. You may need to order additional hazard insurance for your Nebraska home, such as flood insurance.

This process can be time consuming, so it’s best to start as early as possible. Also, you should avoid any chances to your financial situation while the loan is being approved.

Phase 3: The Final Closing in Nebraska

In Nebraska, real estate transactions are closed with both parties (buyers and sellers) together at the same table. You’ll meet with all appropriate people to sign documents, make final payments, and receive the keys to your new home. 

1. A title search should have been completed before the closing. The title should be free of complications and issues that would prevent the legal sale of the property. 
2. A final cash figure will be calculated. You’ll need to bring this amount in the form of a cashier’s check. 
3. You will complete a final walkthrough of the property before the closing. This is to ensure there has been no damage since you last saw the home and the property.
4. You will sign all documents at the closing, including documents that finalize the loan. 
5. The representative from the title company, or the attorney, will record the transaction and the deed with the appropriate municipality which could be the city or county where the Nebraska property is located.
6. The keys will be given to you and you can now move into your new home!

Conforming Loan Limits

The limits for conforming loans are set by the Federal Housing Finance Agency, or “FHFA.” This group determines the limits on a county-by-county basis, with high-priced counties receiving higher loan limits, which allows buyers to use high-quality loans in these areas. 

In the state of Nebraska, the limit for a single-family homes in all counties is $647,200. From the Missouri River to the Wyoming border, this is the most you can borrow and still use a conforming loan, which includes FHA, VA, and Fannie Mae-supported mortgages. It also includes some of the most expensive areas in the state, including Lincoln, the state capital, as well as Omaha, the largest city in Nebraska.

If you want to purchase a two-unit property in Nebraska, conforming loans can be used. In the state of Montana, the limits are $828,700 for a two-unit property, $1,001,650 for a three-unit property, and $1,244,850 if you want to purchase a four-unit property.

These are the limits for conforming loans only. There are other options available, including Nebraska jumbo loans. Contact our team if you need a loan outside of the Nebraska conforming loan limits.

Note: The FHFA adjusts the loan limits on a regular basis, and the numbers listed above may no longer be accurate. For up-to-date limits, contact our team right away.

Downpayment Assistance Programs in Nebraska

Homeownership can be incredibly beneficial, but the downpayment, which often requires thousands of dollars, is a significant barrier for many aspiring homeowners.

If you live in Nebraska, you have access to state and local downpayment assistance (DPA) programs, as well as non-profit support that can help you overcome the downpayment challenge.

Statewide DPA Programs in Nebraska

NIFA Homebuyer Assistance Program

Buyers in Nebraska who need help purchasing a home should start with the Nebraska Investment Finance Authority, or “NIFA.” This statewide organization offers the Homebuyer Assistance Program, which provides a second mortgage loan that can be used for a downpayment or closing costs. The maximum amount is 5% of the total purchase price, but there may be limits on how much you can borrow in total. One of the most impressive aspects of this program is that the second loan comes with an interest rate of only 1%.

Major Local Programs for Nebraska Homebuyers

Buyers in different cities and counties will have access to various downpayment programs, including support from local governments and non-profit organizations.

City of Omaha Downpayment Assistance
As the largest city in Nebraska, Omaha attracts people from all across the Midwest and the United States. Housing can become expensive in this high-demand city, so the local government has created a program that brings downpayment assistance to aspiring buyers.

Northern Ponca Housing Authority
Serving a large area of Nebraska, as well as sections of South Dakota and Iowa, the Northern Ponca Housing Authority helps members of the Ponca Tribe who want to purchase affordable housing. Their services include low-income housing support and downpayment assistance.

NeighborWorks Northeast Nebraska
NeighborWorks is a national program that helps aspiring homebuyers all across the country. Working from regional offices, they provide top-quality downpayment assistance. According to their website, in 2018 the Northeast Nebraska office surpassed $10 million in downpayment assistance loans.

Common Requirements for Nebraska Downpayment Assistance

You will find a variety of requirements for these programs. Most common, however, is an income restriction. These programs are usually intended for low-income buyers, but people with moderate incomes can also use some DPA programs.

Many programs also require that you bring at least a small portion of your own cash. The assistance program from NIFA, for example, requires buyers to bring at least $1,000 of personal money.

There could also be a credit requirement (usually 620 or 640), and there could be a limit on the total purchase price.

Downpayment programs in Nebraska are always changing. For up-to-date information on the latest programs, contact our team right away!