13 Best First-Time Homebuyer Programs

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First-time homebuyers are inexperienced and heading into a daunting process with a steep learning curve — but they also have a lot going for them. At both the state and national levels, programs exist specifically to help people get into their first homes. Some offer low interest rates, forgiving credit requirements, small down payments, or federal guarantees to lenders. Some are for veterans, low-income buyers, people in rural areas, or first responders. All, however, exist solely to make the purchase of your first home simpler, more accessible, and more affordable.

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National First-Time Homebuyer Programs

Some first-time homebuyer programs are federally funded. Check out these nine offerings backed by the U.S. government to see if any fit your needs:

1. FHA Loans

The Federal Housing Authority guarantees loans issued by its approved lenders, which reduces their risk and lets them lower their credit and down payment requirements. You need a FICO score of at least 580 to apply for an FHA loan.

Consider these aspects of FHA loans:

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2. USDA Loans

U.S. Department of Agriculture loans are for low- and moderate-income families in eligible rural areas. The program guarantees 90 percent of the loan, which reduces most of the lender’s risk.

To get a USDA loan, you must meet the following requirements:

3. VA Loans

The Veterans Administration provides nationwide home buying assistance to service members, veterans, and eligible surviving spouses. It guarantees a portion of a mortgage from a private lender, which typically results in more favorable loan terms.

Here’s what you need to know about VA mortgages:

4. Good Neighbor Next Door Sales Program

The U.S. Department of Housing and Urban Development offers national home purchase assistance to law enforcement officers, qualifying teachers, firefighters, and emergency medical technicians. If you qualify for this program, you’ll get a 50 percent reduction on the list price of the home for committing to live in it for 36 months as your principal residence.

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Other requirements apply:

5. Fannie Mae Loans

Fannie Mae offers 3 percent down payment mortgages to help first-time homebuyers. You can talk to your lender about the program and see if you meet eligibility requirements.

You must meet certain criteria to qualify for the program, including the following:

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6. Freddie Mac Loans

Freddie Mac Home Possible mortgages are designed to help first-time homebuyers achieve the American dream. The program meets the financing needs of low- and moderate-income borrowers who need low down payments and the ability to use flexible sources of funds.

You might be interested in one of these loans if:

7. Energy-Efficient Mortgage Loans

An EEM is federally recognized and can be applied to most mortgages — and it credits a home’s energy efficiency in the mortgage itself. EEMs enable you to finance energy-saving measures as part of a mortgage and stretch debt-to-income qualifying ratios on loans to get a better home. Three types of EEMs are available: Energy Star partner (conventional) lender loans, VA loans and FHA loans.

If you get an energy-efficient mortgage, you might:

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8. FHA 203k Rehab Loans

An FHA 203k loan is backed by the federal government and available to buyers who want to invest in a fixer-upper home and renovate it. For example, if you choose a home that needs a new bathroom and kitchen, an FHA 203k lender would then give you enough money to both buy the house and do the renovations.

An FHA 203k rehab loan will cover things like plumbing improvements, heating and air conditioning system repairs, and new siding and additions. It won’t cover luxury improvements, however, such as adding a pool or a tennis court to your property.

Often this loan will include:

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9. NADL Program

The Native American Direct Loan program provides eligible Native American veterans and their spouses the ability to use a VA home loan guaranty benefit to buy property on federal trust land at a reduced interest rate.

You don’t have to make a down payment with this loan, and it can be relatively easy to qualify. In addition, you won’t have to pay PMI.

Other features of an NADL include:

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State First-Time Homebuyer Programs

Each state has its own programs designed to help first-time homebuyers. Learn about four different state-specific programs to see what types of programs might be available to you.

1. Texas SAHC Loans

The Texas State Affordable Housing Corporation provides mortgage loans, down payment assistance grants, and mortgage credit certificates to first-time homebuyers. It offers two different types of programs: the Homes for Texas Heroes Home Loan Program and the Home Sweet Texas Home Loan Program.

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The first program is designed specifically for teachers, firefighters, emergency medical services personnel, police, correctional officers, and veterans. The latter program is for those with low- to moderate-income levels.

Features of these loans include:

2. CalHFA Loans

The California Housing Finance Agency offers options for first-time buyers and low- to moderate-income families to purchase homes, including low- to no-interest rate down payment assistance loans. You must be approved by a CalHFA approved lender, who will determine how much you can borrow based on your gross income, current debts, new mortgage payment, and credit. Both government loans and conventional loans are available.

The loans come with some requirements, such as:

3. SONYMA Achieving the Dream Program

The State of New York Mortgage Agency’s Achieving the Dream Mortgage Program is for low-income, first-time homebuyers. The program consists of a 30-year loan with lower interest rates that you can use to finance one- to four-family properties.

Other features of this program include:

You must have a job, a good credit history, and meet income and purchase price limits.

Note that you must contribute 1 percent of the property value if you’re buying a home and 3 percent if you’re buying a co-op.

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4. FHFC First-Time Homebuyer Program

The Florida Housing Finance Corporation First-Time Homebuyer Program offers 30-year, fixed-rate loans through participating lenders. And even if you’re not a first-time homebuyer, you might still be eligible to take advantage of the program if you buy a house in a federally designated targeted area or are a qualified veteran.

Other details of the program include the following:

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Andrew Lisa contributed to the reporting for this article.

Last updated: Mar. 26, 2021