Here is a little about me:

- Yearly income: 54K
- Credit Card Debt: None.
- Credit Score: Experian vantagescore is 855, which corresponds to 755 FICO I believe (855 x 0.86).
- Car Payment: None. Might sell the car (20K) for a downpayment.
- Student Loan: 6K perkins at 3%.
- Retirement Account: 32K (traditional IRA 8.5K, 401a 3K, voluntary TDA 403c 20K)
- Savings/Checking: 4K
- Status: First time home/condo buyer. Buying to reside (not to invest).

Couple of questions:

1. Can I buy a house with my financial profile?
2. What should be my ideal and max. mortgage amount? (i.e. a condo of 244K etc.)
3. Is it wise for me to maximize my IRAs and TDAs at the moment, when I don't have a place to call home? Is it better to put whatever I earn in a house, rather than save for later?
4. My Retirement Account lost 5% (Fidelity) last year. Should I stop my voluntary TDA contributions and put that amount into a savings account or CD instead?
5. How much of my retirement (TDA or IRA) can I take off for my first home purchase?
6. I am interested in 1BD/1BA condo unit. I can buy a 2BD/2BA and rent one 1BD, which would help the mortgage. Then again, I was hoping to get away from roommate-style-living. Has any of you done that? Any regrets? Do you feel you made the right decision by 2BD/2BA and rent the other half? Should I by 1BD/1BA and just be happy that it is my home (no roommate hassles)?
7. At this point what should I be doing? What should be my next steps?

Thank you so much!

Where do you live. I believe you could

1. How old are you?
2. What region are you looking at?
3. Summarize your job security and your intent (or lack thereof) to switch jobs in the next 5 years.

That's a bit pricey for your income. A roomate might make it work. You also need to think about how that subsidy works. They usually have onerous terms on you selling the place etc. Don't count on that income bump until it actually happens.

If you can sell the car for 20k then it seems doable, otherwise you'll really be pushing it for your down payment/closing costs. Get a roommate and stick to places that are in the lower half of your price range and I'm guessing you'll be fine.

Did you do a buy vs. rent calculation. It may not be that bad to rent, financially. Besides, you will not be tied to the Boston area; come advance degree and you could consider your options nationwide instead of relying on current employer to give you a bump. At your age and assuming you are single, chances of your staying put in Boston for 5-10 years are not very high.

Another thought: Why not contribute to a Roth (at least partially) instead of trad. IRA.

Do buy vs. rent calculation first.

Rink.

"If you can sell the car for 20k then it seems doable, otherwise you'll really be pushing it for your down payment/closing costs."
I was under the impression that I can also use up to 10K from my IRA account (without a tax penalty) for the downpayment for my first house. Should I do that? Any disadvantages?

"No no no! Savings accounts and CDs are exactly the wrong place for your money if you're young and saving for retirement. Who cares if your retirement accounts dropped 5% in the past year? Retirement is 30 years in the future, a one year drop is meaningless."
I understand. So I should not transfer that fund anywhere. Can I use any portion of that money (403c voluntary TDA) for my downpayment though? Did I make a mistake but putting every excess penny to a voluntary TDA? Should I have increased my savings account instead? (for a downpayment)

"Did you do a buy vs. rent calculation."
This is a little tricky because if I rent I try to rent a room in someone's house to save money (rather than renting a similar 1BD/1BA apartment), so it is apples vs. oranges comparison. I did put $1340 rent (1BD/1BA I would be staying, if I had lived by myself) and 10% downpayment (with my TDA+sale of the car), 220K purchase price, 5% condo appreciation, 3% rent increase, 6.1% mortgage rate, 1.35% annual property taxes - and it said it is better to buy after 2 years. Does that mean it is a good financial move if I stay in that house for at least 2 years?

"Another thought: Why not contribute to a Roth (at least partially) instead of trad. IRA."
I thought I could only contribute to one but not both, that is why. What advantages do I have (in this house buying context) if I do that?

Are you sure that as a single person at a $54K salary you would even qualify as a low income buyer?

Yes. You need to have less than $54.9K (FHA's 100% low-income level) income and less than 75K in assets, which is the case for me.

bostonian123 said:"Besides, you will not be tied to the Boston area; come advance degree and you could consider your options nationwide instead of relying on current employer to give you a bump. At your age and assuming you are single, chances of your staying put in Boston for 5-10 years are not very high."
True, I will not be tied to Boston if I don't buy. However, the deal is too good to pass up. You are paying 220K-240K for a condo worth 650K-700K (similar sq. ft non-deed restricted units in the same building). Great deal, if you happen to be a first time buyer with a low-income! I won't be eligible for these units next year, so I feel like I should buy one now. If I miss this boat (city sponsored affordable units) I would have to pay more than 500K for a similar unit in the city (and I can't afford that for years). Don't you all think I should use this opportunity?
650k houses for 220k because of city subsidy? That sounds too good to be true. Where do you get the 650k figure from? WHat are the strings attached to the city subsidy? ANy restrictions on when you can sell? Do you owe anything back when you sell?
bostonian123 said:
"Another thought: Why not contribute to a Roth (at least partially) instead of trad. IRA."
I thought I could only contribute to one but not both, that is why. What advantages do I have (in this house buying context) if I do that?
You can contribute to both as long as the total contribution is less than what you qualify for (lesser of 5k or earned income for that year). The Roth suggestion was under the scenario that you are not buying this house; in which case maximizing retirement contrib. is a good option. Roth does not give you a deduction now but it fully tax-free when you withdraw at retirement. There are other advantages to Roth as well.