First Time Home Buyer | Low Down Payment Programs

There’s a lot to think about when buying a house – and it’s normal to have questions, especially if you are a first time home buyer.

First time home buyer programs help make homeownership more affordable for people who haven’t ever owned a home (or haven’t owned a home in some time). Multiple programs are available that usually include a home loan with a better interest rate, a lower down payment requirement and other upsides like down payment and closing costs assistance.

Who is a First Time Home Buyer?

The official definition of a first time home buyer may be broader than you think. The US Department of Housing and Urban Development (HUD) definition is someone who:

Has never purchased a home
Has not purchased a home within the past three years
Has only owned a home with a former spouse and is now a single parent or displaced homemaker

Popular First Time Home Buyer Programs

Loan programs that are ideal for first time home buyers include both Conventional and Government backed programs.

Government Backed Loan Programs

FHA loans: FHA home loans are backed by the Federal Housing Administration (FHA). An FHA loan is a great option as it allows for a 3.5% down payment, lower credit scores (down to 580), and expanded debt-to-income ratios.

FHA – Good Neighbor Next Door: Law enforcement officers, teachers (pre-Kindergarten through 12th grade) firefighters and emergency medical technicians can contribute to community revitalization while becoming homeowners through HUD’s Good Neighbor Next Door Sales Program.

HUD offers a substantial incentive in the form of a discount of 50% from the list price of the home. In return, an eligible buyer must commit to live in the property for 36 months as his/her principal residence. The properties available are foreclosures and are very affordable, even without the discount. You can view a list of available properties here.

FHA – $100 Down Payment: The $100 Down program is designed to sell HUD foreclosed homes fast and quickly to owner occupants. It’s an FHA loan where the standard 3.5% down payment is reduced to $100. You can view a list of available properties here.

VA loans – VA home loans provide affordable housing options to qualified veterans, service members and surviving spouses courtesy of the Department of Veterans Affairs (VA). VA loans don’t require a down payment and have flexible credit score requirements for borrowers.

USDA loans – USDA home loans are a very popular first time home buyer loan as they are “zero” down loans and come with great interest rates. Eligible home buyers can get a no down payment loan for properties located in USDA eligible areas. You can check USDA property eligibility here.

Conventional Loan Programs

HomeReady – HomeReady is a Fannie Mae program that only requires a 3% down payment while providing reduced mortgage insurance premiums and attractive interest rates. No requirement to be a first-time homebuyer but does have income limitations. Income limits can be checked using the Fannie Mae Income Look Up Tool.

HomeReady First – HomeReady First is a 3% down payment “Special Purpose” program designed to promote home ownership in underserved areas. Unlike all other programs, eligibility is based on the borrower’s current primary residence and not the property being purchased. Only select metropolitan statistical areas (MSA) are eligible. Eligibility can be checked using the Fannie Mae Income Look Up Tool. This program offers a $5,000 down payment grant, $500 towards the appraisal and $500 towards a home warranty.

Home Possible – Freddie Mac’s HomePossible program is the counterpart to the HomeReady program, with a 3% down payment. No requirement to be a first-time homebuyer but doe have income limitations. Income limits can be checked using the Freddie Mac Income Look Up Tool.

HomeOne – HomeOne is an expansion of Freddie Mac’s Home Possible program offering a 3% down payment but does NOT have income limits.

Down Payment Assistance (DPA):

While many loan programs allow for a low down-payment, saving for the down payment remains the number one challenge for first time home buyers. A very popular way to cover the expense is by using a Down Payment Assistance program. There are numerous DPA programs available including:

Grants
Gifts
Second Mortgage – non-repayable
Second Mortgage – repayable

When combined with a low-down payment mortgage, a DPA program is a great way to buy a home with “zero down”. Click here to check out a complete list of DPA’s that we offer.

Where are First Time Home Buyer loans available?

First Time Home Buyer programs are available anywhere in the states we operate in. Our dedicated teams of local mortgage brokers are ready to help you find the home loan that best suits your needs.

First Time Home Buyer Georgia
First Time Home Buyer Alabama
First Time Home Buyer Florida
First Time Home Buyer North Carolina
First Time Home Buyer South Carolina

Ready to get started?

If you are interested in learning more about our first time home buyer programs, we are here to answer all of your questions. We will walk through the numbers and the process, from application to closing.

First time home buyers typically have a lot of questions and we love to help!