Question about first time loan for a first time homeowner.

[Lyman DeAnn-Gaines II]

Hello Biggerpockets, just a littlepocket here. I am taking this year to push for my first property to rent one unit and live in the other. I went searching for information on any possibilities for me to get a property this year or if I have to start the game with a long stretch of saving money for my first purchase. At first i came across FHA and 203k FHA loans, which these caught my attention on the spot. Sadly, with my preference of my first property being in Chicago, I would still have to spend time saving for a down payment and closing costs. So I kept looking for and other potential ways to grant me my first home. I stumbled upon IHDA down payment assistance programs for first time buyers and I am trying to get more information about this. I am jumping the gun while looking for information to ask everyone here, does anyone have experience or know much about this assistance program, or any similar programs? Is it actually a good idea, or are there some strings attached?

P.S. I posted this yesterday in another forum but someone informed me that I would get the best help from a local forum, so here I am!

[Erik W.]

I would push pause and ask myself a few questions before jumping into this.

1) What experiences do you have that have prepared you not only for home-ownership but also being a land lord?

2) What reserves are at your disposal if you have a prolonged vacancy or major expense in your rented unit?

3) What other debts do you have that should be cleared up first?

For many people, being a first time homeowner is exciting but also terrifying.  No more do you get to call the land lord when the $7,000 HVAC system goes out or the roof leaks: now that's on you.  Your pockets should be sufficiently "deep" to handle repairs.  Also, if you were a renter, your land lord was paying the taxes and insurance.  Granted, you were too since your rent is used to cover those, but just keep in the when you see those ads "Own a home for less than your monthly rent..." there is a lot more to be said about expenses, upkeep, etc.  It's not a fair apples to apples comparison.  Many renters who pay $1,000 in rent are surprised to see their $900 / month house payment has an additional $300 stacked on top of it for taxes and insurance. 

In addition to all the fun of being a new home owner, how much do you know about land lord / tenant law in your state?  Do you know how to screen tenants?  Are you able to accurately price your unit so that you aren't giving it away, but likewise aren't sitting vacant because you're overpriced?  Are you okay with your neighbor beating on your door at 1 am if the toilet is clogged?  Are you okay with evicting your neighbor and tossing them/their kids onto the street if they don't pay on time?  That's part of the joy of house hacking: your tenant is your neighbor.  There is less of a distance between you and your tenant, and often times I see the land lord giving a neighbor tenant a lot more slack on things due to that close physical proximity.  By contract, none of my tenants even know where I live.  If things go badly at one of my rentals, my attorney delivers papers and 30 days or less later they are gone.  Your next door neighbor might be less...."pleased" with you and choose to express that since you live...10 feet away.  Literally.

All fun stuff to think about.  Happy investing!