Regulations that govern the homebuying process vary from state to state. As a buyer, you should familiarize yourself with the laws in your state. Here’s what you need to know about purchasing a home in Louisiana:
In Louisiana, property sellers must complete a Property Disclosure Document and are required by law to disclose any known defects within the home that does any one of the following:
Additionally, the sellers must disclose on the form if the buyers must adhere to “Obtain and Maintain Insurance Requirements,” a federal law that dictates flood insurance must be secured and maintained on a property if the owner received federal disaster assistance or if the home is in a designated Special Flood Hazard Area.
If sellers provide the Property Disclosure Document after the buyer makes an offer, the buyer has 72 hours after receipt of the form to cancel or withdraw the offer without loss of deposit or any other penalty. Some sellers are exempt from providing a Property Disclosure Document, for example, in the sale of a newly-built home that has never been occupied.
Louisiana is a judicial foreclosure state, which means if you encounter difficulty affording your mortgage payments, your lender will need to go through a legal process in court before they can foreclose on your property. In some cases, the process can take as little as 60 days.
Homebuyers who are going through a divorce should know that Louisiana is one of the few community property states in the country. This means that spouses evenly own assets and debts acquired during the marriage, unless a marriage contract is in place. Community property laws could affect your ability to qualify for financing, as some government loan programs consider the debt of both spouses in community property states, even if one partner will not be a homeowner.
If you married outside of Louisiana and later moved to the state, your union will be under Louisiana’s law upon moving. You’ll have one year within your move to establish a marriage contract without having to seek court approval.
In Louisiana, buyers do not have to hire an attorney to represent them, as is the requirement in some states. Buyers can choose to work with an escrow agent.
Louisiana does not impose a real estate transfer tax; the state banned the tax in 2011. However, the city of New Orleans does impose a Document Transaction Tax, which is typically a flat fee of $325. The cost may be higher depending on the property type, and it is lower for mortgages under $9,000. If this tax applies to you, your lender will let you know the exact amount you’ll need to pay as you near your closing date.
Homeowners do pay annual property taxes, of course. To help reduce the burden, Louisiana provides a statewide homestead exemption of $75,000 of the home’s market value to those who own and occupy their homes. Some parishes extend the exemption to $150,000 for eligible veterans, while others offer additional exemptions.
Louisiana has one of the lowest property tax rates in the country, with a median tax of $243 based on a $135,400 home, according to Tax-Rates.org. Tax rates vary by parish. For example, residents of St. Tammany Parish pay an average of $1,335 in property taxes, which is the highest tax rate in Louisiana, while residents of St. Landry Parish pay only $202, which is the state’s lowest rate.
The conforming loan limit in Louisiana is $484,350, which is the loan limit in place for most areas in the country. Conforming loan limits represent the maximum amount Fannie Mae and Freddie Mac will insure for conventional loans. Mortgages above conventional loan limits are called jumbo loans and usually have higher interest rates and stricter lending requirements.
The Louisiana Housing Corporation (LHC) provides multiple programs to help make homeownership more accessible and affordable for Louisianans, a few of which we highlight below. Assistance ranges from mortgages with below-market interest rates to assistance with down payments and closing costs.
In addition to statewide programs, parishes and towns may offer homebuyer assistance. Learn more about programs available throughout the state by visiting the U.S. Department of Housing and Urban Development (HUD).
This program offers buyers fixed government loans at competitive interest rates.
Low- to moderate-income buyers who lack traditional credit can purchase a home with this program, which provides up to 100% financing.
This program provides an alternative to FHA loans by allowing high loan-to-value (LTV) limits.
This program helps buyers bridge the gap between an affordable mortgage payment and the home purchase price.