Best and Worst States for First-Time Homebuyers

Buying a home is known as the American dream, but many Americans remain waiting to buy that first property, discouraged by home prices, higher interest rates and the lack of savings for a down payment.

But maybe they haven’t investigated just what assistance their states can offer first-time homebuyers. Depending on where they live, homebuyers could tap into loan programs that offer attractive interest rates, as well as assistance with down payments and closing costs that make buying a home achievable.

Of course, the offerings and rules vary by state. In general, however, the states tend to have minimum credit score requirements, earnings limits and some special conditions pertaining to where the property is located.

To see which states offer the best financing options for first-time homebuyers, GOBankingRates ranked the 50 states based on three factors: the yearly mortgage for a typical single-family home, as determined by Zillow in June 2023, and assuming a 6% down payment; the current interest rate on a 30-year, fixed loan as sourced from the St. Louis Federal Reserve; and estimated property taxes, as sourced from the Tax Foundation.

For additional information, GOBankingRates also found used the costs of buying a two-bedroom single-family home, which might appeal to first-time buyers, as well as the foreclosure rates in each state, as sourced from SoFi for June 2023.

Where does your state rank in terms of being affordable for first-time homebuyers.

• 2023 home value for typical SFR: $962,201
• 6% down payment: $57,732
• Monthly mortgage payment for typical SFR: $6,151
• 2023 home value for two-bedroom SFR: $619,691
• 6% Down Payment: $37,181
• Monthly mortgage payment for two-bedroom SFR: $3,961
• Foreclosure Rate: 1 out of 4,455 homes

Hawaii easily takes first place for the most expensive housing in the U.S. If you’re looking to buy your first home in Hawaii, some help might be available. Hawaiian first-time homebuyers can apply for the Down Payment Assistance Loan program offered through the Hawaii HomeOwnership Center.

• 2023 home value for typical SFR: $756,842
• 6% down payment: $45,411
• Monthly mortgage payment for typical SFR: $5,103
• 2023 home value for two-bedroom SFR: $613,528
• 6% Down Payment: $36,812
• Monthly mortgage payment for two-bedroom SFR: $4,137
• Foreclosure Rate: 1 out of 3.982 homes

With the second-costliest real estate in the nation, California isn’t an easy market for first-time buyers. Still, you can apply for the CalPLUS Conventional Program and CalHFA Zero Interest Program CalPLUS FHA Program to help manage the cost of buying a home. The latter is for closing costs.

• 2023 home value for typical SFR: $491,482
• 6% down payment: $29,489
• Monthly mortgage payment for typical SFR: $3,920
• 2023 home value for two-bedroom SFR: $344,896
• 6% Down Payment: $20,694
• Monthly mortgage payment for two-bedroom SFR: $2,751
• Foreclosure Rate: 1 out of 2,189 homes

The value of a typical single-family residence in New Jersey is almost a half-million dollars, giving the state the ninth-highest price. That doesn’t make it easy for first-time homebuyers.

New Jersey has assistance available for first-time homebuyers. The Homeward Bound Mortgage Program has a 30-year, fixed-rate government-insured loan for qualified applicants. It can be used in conjunction with the state’s Down Payment Assistance Program, which provides either $10,000 or $15,000 toward closing costs and/or a down payment, depending on the location of the property. Best of all, the down payment loan is forgiven if the homebuyer lives in the property for five years and doesn’t refinance the mortgage.

• 2023 home value for typical SFR: $600,478
• 6% down payment: $36,029
• Monthly mortgage payment for typical SFR: $4,254
• 2023 home value for two-bedroom SFR: $461,304
• 6% Down Payment: $27,678
• Monthly mortgage payment for two-bedroom SFR: $3,268
• Foreclosure Rate: 1 out of 4,325 homes

Typical single-family homes in Massachusetts hit the $600,000 mark in June, and homebuyers likely would welcome assistance. MassHousing says it provides about $700 million annually to about combined 3,000 buyers each year through loans and down payment assistance.

• 2023 home value for typical SFR: $409,144
• 6% down payment: $24,549
• Monthly mortgage payment for typical SFR: $2,864
• 2023 home value for two-bedroom SFR: $266,921
• 6% Down Payment: $16,015
• Monthly mortgage payment for two-bedroom SFR: $1,869
• Foreclosure Rate: 1 out of 1,733 homes

Housing costs aren’t cheap in Maryland, with the typical single-family home valued at nearly $400,000.

First-time homebuyers in Maryland can take advantage of several loan products provided by the state Department of Housing and Community Development through the Maryland Mortgage Program. Offerings include a 30-year, fixed-rate mortgage with down payment assistance.

• 2023 home value for typical SFR: $393,424
• 6% down payment: $23,605
• Monthly mortgage payment for typical SFR: $2,990
• 2023 home value for two-bedroom SFR: $267,477
• 6% Down Payment: $16,049
• Monthly mortgage payment for two-bedroom SFR: $2,033
• Foreclosure Rate: 1 out of 2,272 homes

First-time homebuyer programs can help alleviate the burden of Connecticut’s cost of living. The Connecticut Housing Finance Authority offers a range of home loan products that first-time homebuyers can take advantage of, including its conventional homebuyer mortgage program and assistance with down payments and closing costs.

• 2023 home value for typical SFR: $589,647
• 6% down payment: $35,379
• Monthly mortgage payment for typical SFR: $4,050
• 2023 home value for two-bedroom SFR: $451,432
• 6% Down Payment: $27,086
• Monthly mortgage payment for two-bedroom SFR: $3,100
• Foreclosure Rate: 1 out of 9,816 homes

At the start of 2019, Washington’s median sales price sat right about $400,000, according to Redfin. Now, the typical home has a value approaching $600,000. First-time homebuyers could find a benefit in checking out the state’s Home Advantage and House Key Opportunity programs, which connect purchasers with mortgage providers, or the down payment assistance offering.

• 2023 home value for typical SFR: $404,754
• 6% down payment: $24,285
• Monthly mortgage payment for typical SFR: $2,790
• 2023 home value for two-bedroom SFR: $293,027
• 6% Down Payment: $17,582
• Monthly mortgage payment for two-bedroom SFR: $2,020
• Foreclosure Rate: 1 out of 2,470 homes

In terms of foreclosures, Florida is among the worst states to buy a home. If you’re a first-time homebuyer in Florida, check out the state’s homebuyer program to see if you qualify, as well as its down payment assistance program. As with other states, the repayment on down payments can be deferred during the life of the mortgage. It’s worth a look since you might need all the assistance you can get to make your paycheck stretch further.

• 2023 home value for typical SFR: $359,870
• 6% down payment: $21,592
• Monthly mortgage payment for typical SFR: $2,385
• 2023 home value for two-bedroom SFR: $243,519
• 6% Down Payment: $14,611
• Monthly mortgage payment for two-bedroom SFR: $1,614
• Foreclosure Rate: 1 out of 2,171 homes

Foreclosure rates in Delaware are among the highest in the country, but first-time homebuyers can get some financial help. A first-time homebuyer tax credit can give homebuyers a tax reduction of up to $2,000.

In June, the Delaware State Housing Authority introduced four programs to spur home ownership, assisting with both mortgage loans and down payments.

• 2023 home value for typical SFR: $432,328
• 6% down payment: $25,940
• Monthly mortgage payment for typical SFR: $2,868
• 2023 home value for two-bedroom SFR: $305,348
• 6% Down Payment: $18,321
• Monthly mortgage payment for two-bedroom SFR: $2,026
• Foreclosure Rate: 1 out of 3,097 homes

Nevada’s median home price was a tick under $300,000 five years ago, according to Redin. That means home values have increased by almost 50% in that time, making it tougher to buy a house.

The Nevada Housing Division offers home financing through its Home Is Possible programs, which provide money for down payment or closing costs. The assistance is forgivable after seven years, provided you stay in your home.

• 2023 home value for typical SFR: $552,545
• 6% down payment: $33,153
• Monthly mortgage payment for typical SFR: $3,638
• 2023 home value for two-bedroom SFR: $419,492
• 6% Down Payment: $25,170
• Monthly mortgage payment for two-bedroom SFR: $2,762
• Foreclosure Rate: 1 out of 9,059 homes

With typical single-family homes selling for about $550,000 in Colorado, programs through the Colorado Housing and Finance Authority can assist with both first and second mortgages to make affordability easier.

• 2023 home value for typical SFR: $460,192
• 6% down payment: $27,611
• Monthly mortgage payment for typical SFR: $3,575
• 2023 home value for two-bedroom SFR: $346,649
• 6% Down Payment: $20,799
• Monthly mortgage payment for two-bedroom SFR: $2,693
• Foreclosure Rate: 1 out of 7,858 homes

Homebuyers can get assistance through New Hampshire Housing, which offers a number of homebuying programs. Buyers can review the state’s offerings for 30-year fixed rates, low or no down payment loans, and options to reduce mortgage insurance.

• 2023 home value for typical SFR: $414,932
• 6% down payment: $24,896
• Monthly mortgage payment for typical SFR: $3,023
• 2023 home value for two-bedroom SFR: $290,530
• 6% Down Payment: $17,432
• Monthly mortgage payment for two-bedroom SFR: $2,116
• Foreclosure Rate: 1 out of 3,631 homes

Although housing can get costly in some regions of the state, New York offers more affordable markets than the neighboring New England states. A separate GOBankingRates study named Syracuse one of the best places for first-time homebuyers.

The State of New York Mortgage Assistance program offers a variety of help for first-time buyers. Help comes in the form of competitive mortgage programs, down payment assistance, loans for remodels and more.

• 2023 home value for typical SFR: $520,095
• 6% down payment: $31,206
• Monthly mortgage payment for typical SFR: $3,446
• 2023 home value for two-bedroom SFR: $377,601
• 6% Down Payment: $22,656
• Monthly mortgage payment for two-bedroom SFR: $2,502
• Foreclosure Rate: 1 out of 6,030 homes

The Utah Housing Corp. can introduce prospective homebuyers to a variety of loans, and the best loan will depend on everything from credit score and income to where the home is located within the state. Down payment assistance also is available to qualified buyers.

• 2023 home value for typical SFR: $502,884
• 6% down payment: $30,173
• Monthly mortgage payment for typical SFR: $3,479
• 2023 home value for two-bedroom SFR: $382,864
• 6% Down Payment: $22,972
• Monthly mortgage payment for two-bedroom SFR: $2,649
• Foreclosure Rate: 1 out of 7,622 homes

To make buying a home more achievable in the pricey state, the Oregon Housing and Community Services Agency has a residential loan program that offers mortgage options with affordable 30-year fixed interest rates with even no money down.

• 2023 home value for typical SFR: $436,824
• 6% down payment: $26,209
• Monthly mortgage payment for typical SFR: $3,200
• 2023 home value for two-bedroom SFR: $352,288
• 6% Down Payment: $21,137
• Monthly mortgage payment for two-bedroom SFR: $2,581
• Foreclosure Rate: 1 out of 5,797 homes

The value of a typical single-family residence in Rhode Island is about $80,000 above the national average, however, so getting an affordable home loan is important. Rhode Island Housing’s offerings include the Down Payment Assistance Program for first-time homebuyers. With the grant, homebuyers can receive $17,500 in aid that doesn’t need to be repaid.

• 2023 home value for typical SFR: $371,099
• 6% down payment: $22,266
• Monthly mortgage payment for typical SFR: $2,663
• 2023 home value for two-bedroom SFR: $330,307
• 6% Down Payment: $19,818
• Monthly mortgage payment for two-bedroom SFR: $2,370
• Foreclosure Rate: 1 out of 4,554 homes

Looking at housing affordability by state, Maine’s typical single-family residence value is appealing for a New England state, costing about $20,000 over the U.S. median. Maine homebuyers can apply to the First Home Loan Program, which has low fixed-rate mortgages that qualified applicants can get with little or no money down.

• 2023 home value for typical SFR: $250,086
• 6% down payment: $15,005
• Monthly mortgage payment for typical SFR: $1,961
• 2023 home value for two-bedroom SFR: $196,428
• 6% Down Payment: $11,786
• Monthly mortgage payment for two-bedroom SFR: $1,541
• Foreclosure Rate: 1 out of 2,348 homes

The Illinois Housing Development Authority’s HFA1 program has a 30-year first mortgage with a fixed-interest rate. But it also includes a no-interest second mortgage for $10,000 that doesn’t need to be repaid as long as the mortgage is active.

• 2023 home value for typical SFR: $441,362
• 6% down payment: $26,482
• Monthly mortgage payment for typical SFR: $2,965
• 2023 home value for two-bedroom SFR: $339,071
• 6% Down Payment: $20,344
• Monthly mortgage payment for two-bedroom SFR: $2,278
• Foreclosure Rate: 1 out of 5.378 homes

The Idaho Housing and Finance Association offers several mortgage products, including conventional loans, Rural Development loans in rural areas, FHA loans and VA loans. Loans for help with down payments and closing costs also are available.

• 2023 home value for typical SFR: $430,157
• 6% down payment: $25,809
• Monthly mortgage payment for typical SFR: $2,872
• 2023 home value for two-bedroom SFR: $340,391
• 6% Down Payment: $20,423
• Monthly mortgage payment for two-bedroom SFR: $2,272
• Foreclosure Rate: 1 out of 6,885 homes

In Arizona, the HOME+PLUS program assists buyers with down payments and closing costs. Buyers can take advantage of a 30-year fixed-rate mortgage, combined with down payment assistance of up to 5%.

• 2023 home value for typical SFR: $286,933
• 6% down payment: $17,216
• Monthly mortgage payment for typical SFR: $1,894
• 2023 home value for two-bedroom SFR: $209,677
• 6% Down Payment: $12,581
• Monthly mortgage payment for two-bedroom SFR: $1,384
• Foreclosure Rate: 1 out of 2,533 homes

South Carolina’s typical home value is well below the U.S. typical home value of $350,213, according to Zillow statistics. Still, South Carolina has one of the higher foreclosure rates in the study.

Low- to moderate-income buyers in South Carolina can apply for a state-offered fixed-interest mortgage loan. The South Carolina State Housing Finance and Development Authority also offers down payment assistance that also can help with closing costs. For borrowers who stay in their homes for 15 years, the down payment loan is 100% forgiven.

• 2023 home value for typical SFR: $437,657
• 6% down payment: $26,259
• Monthly mortgage payment for typical SFR: $2,958
• 2023 home value for two-bedroom SFR: $331,801
• 6% Down Payment: $19,908
• Monthly mortgage payment for two-bedroom SFR: $2,243
• Foreclosure Rate: 1 out of 10,251 homes

Montana has one of the lowest foreclosure rates, which bodes well for first-time homebuyers. In the state, first-time homebuyers are eligible for the 80% Combined Program offered by Montana Housing which eliminates the need for private mortgage insurance.

• 2023 home value for typical SFR: $332,831
• 6% down payment: $19,970
• Monthly mortgage payment for typical SFR: $2,347
• 2023 home value for two-bedroom SFR: $258,981
• 6% Down Payment: $15,539
• Monthly mortgage payment for two-bedroom SFR: $1,826
• Foreclosure Rate: 1 out of 5,158 homes

Minnesota’s Start Up and Step Up programs offer affordable interest rates for mortgage loans, as well as options for down payment and closing cost assistance.

• 2023 home value for typical SFR: $317,861
• 6% down payment: $19,072
• Monthly mortgage payment for typical SFR: $2,191
• 2023 home value for two-bedroom SFR: $222,096
• 6% Down Payment: $13,326
• Monthly mortgage payment for two-bedroom SFR: $1,531
• Foreclosure Rate: 1 out of 3,999 homes

The Georgia Dream program is designed to help low- and moderate-income Georgia residents with affordable options to buy their first home in certain specified areas only. Down payment assistance also is available to qualified buyers.

• 2023 home value for typical SFR: $370,966
• 6% down payment: $22,258
• Monthly mortgage payment for typical SFR: $2,545
• 2023 home value for two-bedroom SFR: $251,634
• 6% Down Payment: $15,098
• Monthly mortgage payment for two-bedroom SFR: $1,726
• Foreclosure Rate: 1 out of 5,663 homes

Virginia homes have a price tag slightly above the typical home in the U.S. Fortunately, first-time homebuyers financing options in the state, such as the Down Payment Assistance Program.

• 2023 home value for typical SFR: $376,322
• 6% down payment: $22,579
• Monthly mortgage payment for typical SFR: $2,879
• 2023 home value for two-bedroom SFR: $309,119
• 6% Down Payment: $18,547
• Monthly mortgage payment for two-bedroom SFR: $2,365
• Foreclosure Rate: 1 out of 30,320 homes

Tiny Vermont has a minuscule foreclosure rate, with only one in 30,000 homes in the state in foreclosure. 

For those who want to buy their first home in Vermont, the Vermont Housing Finance Agency has several programs that are open to qualifying first-time homebuyers, including low-interest mortgage loans, help with down payments and closing costs, and tax credits.

• 2023 home value for typical SFR: $317,296
• 6% down payment: $19,038
• Monthly mortgage payment for typical SFR: $2,163
• 2023 home value for two-bedroom SFR: $217,805
• 6% Down Payment: $13,068
• Monthly mortgage payment for two-bedroom SFR: $1,485
• Foreclosure Rate: 1 out of 4,245 homes

Two North Carolina cities — Fayetteville and Greensboro — ranked among the top 25 cities for first-time homebuyers in a recent GOBankingRates study.

First-time homebuyers can apply for the NC Home Advantage Mortgage Program, which can assist with fixed-rate mortgages and help with the down payment, up to 3% of the loan. A separate program — the NC 1st Home Advantage Down Payment — provides a $15,000 down payment loan that is fully forgiven after 15 years. Additionally, some buyers could be eligible for a tax credit of up to $2,000 per year.

• 2023 home value for typical SFR: $360,788
• 6% down payment: $21,647
• Monthly mortgage payment for typical SFR: $2,520
• 2023 home value for two-bedroom SFR: $243,427
• 6% Down Payment: $14,606
• Monthly mortgage payment for two-bedroom SFR: $1,700
• Foreclosure Rate: 1 out of 6,719 homes

Alaska has two programs to support first-time homebuyers: First Home and First Home Limited. Of the two, the latter offers lower interest rates to qualified first-time buyers.

• 2023 home value for typical SFR: $289,501
• 6% down payment: $17,370
• Monthly mortgage payment for typical SFR: $1,935
• 2023 home value for two-bedroom SFR: $239,742
• 6% Down Payment: $14,385
• Monthly mortgage payment for two-bedroom SFR: $1,603
• Foreclosure Rate: 1 out of 4,464 homes

First-time homebuyers will like New Mexico’s typical single-family home value, which falls below the national number.

First-time homebuyers can apply for New Mexico’s FirstHome, FirstDown and HomeNow programs. The first two are mortgage loans for people who haven’t owned a home in at least three years. HomeNow offers down payment help to buyers who meet income requirements.

• 2023 home value for typical SFR: $304,636
• 6% down payment: $18,278
• Monthly mortgage payment for typical SFR: $2,290
• 2023 home value for two-bedroom SFR: $189,540
• 6% Down Payment: $11,372
• Monthly mortgage payment for two-bedroom SFR: $1,425
• Foreclosure Rate: 1 out of 4,997 homes

GOBankingRates’ study of the 25 Best Cities for First-Time Homebuyers turned up five Texas locations: San Antonio, Corpus Christi, El Paso, Lubbock and Brownsville.

The state offers help for first-time buyers, too, through the My First Texas Home, offered by the Texas Department of Housing and Community Affairs. It provides mortgage loans and help with down payments and/or closing costs to those who qualify.

• 2023 home value for typical SFR: $216,770
• 6% down payment: $13,006
• Monthly mortgage payment for typical SFR: $1,615
• 2023 home value for two-bedroom SFR: $147,115
• 6% Down Payment: $8,827
• Monthly mortgage payment for two-bedroom SFR: $1,096
• Foreclosure Rate: 1 out of 3,073 homes

First-time homebuyers will like the typical home price of $216,770, which comes with a 6% down payment of about $13,000. They can get help with that down payment through the Ohio Housing Finance Agency, which also offers first-time homebuyer loan options.

• 2023 home value for typical SFR: $253,030
• 6% down payment: $15,182
• Monthly mortgage payment for typical SFR: $1,866
• 2023 home value for two-bedroom SFR: $188,280
• 6% Down Payment: $11,297
• Monthly mortgage payment for two-bedroom SFR: $1,389
• Foreclosure Rate: 1 out of 4,191 homes

In terms of financing, first-time homebuyers can apply for a loan through the Pennsylvania Housing Finance Agency. In addition to competitive interest rates and lower fees, homebuyers potentially can receive assistance with the down payment and closing costs.

• 2023 home value for typical SFR: $229,041
• 6% down payment: $13,742
• Monthly mortgage payment for typical SFR: $1,668
• 2023 home value for two-bedroom SFR: $177,579
• 6% Down Payment: $10,655
• Monthly mortgage payment for two-bedroom SFR: $1,294
• Foreclosure Rate: 1 out of 3,857 homes

First-time homebuyers are eligible for Michigan State Housing Development Authority’s MI Home Loan program, which includes down payment assistance of up to $10,000.

• 2023 home value for typical SFR: $331,316
• 6% down payment: $19,879
• Monthly mortgage payment for typical SFR: $2,187
• 2023 home value for two-bedroom SFR: $245,749
• 6% Down Payment: $14,745
• Monthly mortgage payment for two-bedroom SFR: $1,622
• Foreclosure Rate: 1 out of 7,551 homes

The Wyoming Community Development Authority offers loan programs for first-time homebuyers, such as its First-Time Homebuyer Program and Spruce Up Wyoming Programs, the latter of which finances costs to purchase and rehabilitate substandard housing. A down payment assistance program also is available, with repayment deferred as long as the original mortgage is active.

• 2023 home value for typical SFR: $227,753
• 6% down payment: $13,665
• Monthly mortgage payment for typical SFR: $1,557
• 2023 home value for two-bedroom SFR: $145,058
• 6% Down Payment: $8,703
• Monthly mortgage payment for two-bedroom SFR: $991
• Foreclosure Rate: 1 out of 3,312 homes

Indianapolis and Fort Wayne made GOBankingRates’ list of 25 Best Cities for First-Time Homebuyers, and they undoubtedly were buoyed by financial opportunities offered via the Indiana Housing and Community Development Authority.

The First Place program can provide help with mortgage loans and down payments, and federal tax credits are possible through the Mortgage Credit Certificate.

• 2023 home value for typical SFR: $218,126
• 6% down payment: $13,088
• Monthly mortgage payment for typical SFR: $1,409
• 2023 home value for two-bedroom SFR: $149,409
• 6% Down Payment: $8,965
• Monthly mortgage payment for two-bedroom SFR: $965
• Foreclosure Rate: 1 out of 3,452 homes

Alabama’s typical single-family residence costs more than $125,000 less than the national typical value, which is a boon for first-time homebuyers. Alabama first-timers can apply for the Step Up mortgage program if their annual household income doesn’t exceed $130,600, according to the Alabama Housing Finance Authority.

• 2023 home value for typical SFR: $283,886
• 6% down payment: $17,033
• Monthly mortgage payment for typical SFR: $2,127
• 2023 home value for two-bedroom SFR: $214,101
• 6% Down Payment: $12,846
• Monthly mortgage payment for two-bedroom SFR: $1,604
• Foreclosure Rate: 1 out of 9,640 homes

Wisconsin’s typical single-family home value is about $65,000 cheaper than the U.S. typical value, and when it comes to affordable mortgage solutions, the Wisconsin Housing and Economic Development Authority offers several home loan programs with income and loan limits that allow for more borrowers to qualify.

• 2023 home value for typical SFR: $251,206
• 6% down payment: $15,072
• Monthly mortgage payment for typical SFR: $1,878
• 2023 home value for two-bedroom SFR: $178,104
• 6% Down Payment: $10,686
• Monthly mortgage payment for two-bedroom SFR: $1,332
• Foreclosure Rate: 1 out of 5,963 homes

The typical home value in Nebraska sits about $100,000 less than the national average. Nebraska first-time homebuyers can research the Homebuyer Assistance Program through the Nebraska Investment Finance Authority, which has mortgages and second mortgages available.

• 2023 home value for typical SFR: $306,848
• 6% down payment: $18,411
• Monthly mortgage payment for typical SFR: $2,056
• 2023 home value for two-bedroom SFR: $229,359
• 6% Down Payment: $13,762
• Monthly mortgage payment for two-bedroom SFR: $1,537
• Foreclosure Rate: 1 out of 9,469 homes

Tennessee is one of top 10 destinations for relocating Americans, according to Forbes. First-time homebuyers in Tennessee can turn to the Great Choice Home Loan program offered by the Tennessee Housing Development Agency, to learn about affordable options for 30-year loans and help with down payments.

• 2023 home value for typical SFR: $209,617
• 6% down payment: $12,577
• Monthly mortgage payment for typical SFR: $1,548
• 2023 home value for two-bedroom SFR: $142,021
• 6% Down Payment: $8,521
• Monthly mortgage payment for two-bedroom SFR: $1,049
• Foreclosure Rate: 1 out of 4,277 homes

With a very affordable typical home value at about $210,000, Iowa could be a haven for first-time homebuyers. The Homes for Iowans program has loan programs that have limited mortgage fees, and funds are available to help with down payments and closing costs.

• 2023 home value for typical SFR: $196,725
• 6% down payment: $11,803
• Monthly mortgage payment for typical SFR: $1,312
• 2023 home value for two-bedroom SFR: $147,455
• 6% Down Payment: $8,847
• Monthly mortgage payment for two-bedroom SFR: $983
• Foreclosure Rate: 1 out of 5,025 homes

Measuring housing affordability by state, Arkansas is one of the best states for homebuyers thanks to typical home value of less than $200,000. 

The Arkansas Development Finance Authority’s Move-Up loan program can help buyers access 30-year mortgage loans, and it also has a pair of down payment assistance programs for buyers meeting the qualifications.

• 2023 home value for typical SFR: $292,162
• 6% down payment: $17,530
• Monthly mortgage payment for typical SFR: $2,080
• 2023 home value for two-bedroom SFR: $223,753
• 6% Down Payment: $13,425
• Monthly mortgage payment for two-bedroom SFR: $1,593
• Foreclosure Rate: 1 out of 77,675 homes

South Dakota boasts the lowest rate of foreclosures in the U.S., and a typical single-family residence there remains less costly than the median in other states. 

The South Dakota Housing Development Authority offers its First-Time Homebuyer Program for those who meet income limits, housing unit criteria and a home purchase price of less than $385,000.

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• 2023 home value for typical SFR: $201,043
• 6% down payment: $12,063
• Monthly mortgage payment for typical SFR: $1,324
• 2023 home value for two-bedroom SFR: $135,740
• 6% Down Payment: $8,144
• Monthly mortgage payment for two-bedroom SFR: $894
• Foreclosure Rate: 1 out of 4,979 homes

Homebuyers in Louisiana can take advantage of home loan programs for mortgages and down payment assistance through the Louisiana Housing Corp.’s Market Rate Conventional Program. The program is open to all homebuyers and not just first-time owners.

• 2023 home value for typical SFR: $233,817
• 6% down payment: $14,029
• Monthly mortgage payment for typical SFR: $1,627
• 2023 home value for two-bedroom SFR: $150,216
• 6% Down Payment: $9,013
• Monthly mortgage payment for two-bedroom SFR: $1,045
• Foreclosure Rate: 1 out of 7,302 homes

More than $100,000 separates the price of the typical single-family home in Missouri and the U.S. average – with Missouri on the good side. GOBankingRate’s study of the best cities for first-time homebuyers to buy uncovered three in the state – St. Louis, Kansas City and Springfield.

No matter where they live in Missouri, first-time buyers can turn to the state’s Housing Development Commission for guidance on the First Place Program and interest rates below market rate. Loans also can be used for help with down payments and closing costs.

• 2023 home value for typical SFR: $252,359
• 6% down payment: $15,142
• Monthly mortgage payment for typical SFR: $1,748
• 2023 home value for two-bedroom SFR: $178,138
• 6% Down Payment: $10,688
• Monthly mortgage payment for two-bedroom SFR: $1,234
• Foreclosure Rate: 1 out of 13,708 homes

As with its neighbor to the south, North Dakota’s minimal foreclosure rate is comforting for homebuyers. Low- to moderate-income first-time homebuyers can apply for the FirstHome Program, offered by the North Dakota Housing Finance Agency. Down payment assistance also is available.

• 2023 home value for typical SFR: $208,159
• 6% down payment: $12,490
• Monthly mortgage payment for typical SFR: $1,506
• 2023 home value for two-bedroom SFR: $108,877
• 6% Down Payment: $6,533
• Monthly mortgage payment for two-bedroom SFR: $788
• Foreclosure Rate: 1 out of 8,714 homes

With a typical home value just shy of $210,000, Kansas remains one of the least-expensive places to buy in the country. And first-time buyers can find loan programs to fit their needs. The Kansas Housing Resources Corp. offers the First Time Homebuyer Program for those eligible, which provides assistance with down payments.

• 2023 home value for typical SFR: $196,251
• 6% down payment: $11,775
• Monthly mortgage payment for typical SFR: $1,348
• 2023 home value for two-bedroom SFR: $97,835
• 6% Down Payment: $5,870
• Monthly mortgage payment for two-bedroom SFR: $672
• Foreclosure Rate: 1 out of 6,673 homes

First-time homebuyers in Oklahoma stand to benefit from a typical home value that is more than $150,000 below the typical value across the U.S.The state can help qualified first-time homebuyers with products such as the Oklahoma Housing Finance Agency’s Gold Loan program, which offers both government and conventional loans.

GOBankingRates’ study of the best cities for first-time homebuyers identified Tulsa and Oklahoma City as great places to buy a home.

• 2023 home value for typical SFR: $199,430
• 6% down payment: $11,966
• Monthly mortgage payment for typical SFR: $1,360
• 2023 home value for two-bedroom SFR: $145,414
• 6% Down Payment: $8,725
• Monthly mortgage payment for two-bedroom SFR: $991
• Foreclosure Rate: 1 out of 10,521 homes

Kentucky offers affordable housing at less than $200,000 for the typical single-family residence. The Kentucky Housing Corp. will connect buyers with lenders who work with first-time buyers, and it also has help available with down payments as well as tax credits.

• 2023 home value for typical SFR: $170,190
• 6% down payment: $10,211
• Monthly mortgage payment for typical SFR: $1,136
• 2023 home value for two-bedroom SFR: $109,604
• 6% Down Payment: $6,576
• Monthly mortgage payment for two-bedroom SFR: $732
• Foreclosure Rate: 1 out of 8,554 homes

Mississippi is even more budget-friendly than Kentucky, with the typical home costing about $170,000. State residents can access affordable homebuying programs offered by the Mississippi Home Corp., including the Smart6, 30-year, fixed-rate mortgage that has a $6,000 second mortgage at 0% interest rolled into it. The loan is repaid when the mortgage no longer is active.

• 2023 home value for typical SFR: $152,926
• 6% down payment: $9,176
• Monthly mortgage payment for typical SFR: $1,008
• 2023 home value for two-bedroom SFR: $94,838
• 6% Down Payment: $5,690
• Monthly mortgage payment for two-bedroom SFR: $625
• Foreclosure Rate: 1 out of 9.342 homes

West Virginia is the most attractive state for first-time homebuyers, with the typical single-family home valued at slightly more than $150,000, allowing for a mortgage payment of just over $1,000.

The West Virginia Housing Development Fund offers its Homeownership Program to borrowers who have a gross income that falls within county income limits, are buying a home within a certain price limit and have not owned a home within the last three years in specific counties.

Andrew DePietro and Gabrielle Olya contributed to the reporting of this article.

Methodology: For this piece GOBankingRates first found the typical single family value home value in 2023 for every state from Zillow’s June 2023 data. GOBankingRates then found (1) yearly mortgage for a typical SFR by assuming 6% down payment (typical for first time homebuyers according to Rocket Mortgage), 30-year fixed loan, current interest rate as sourced from St. Louis Federal Reserve (6.81%), and typical property taxes as sourced from TaxFoundation. GOBankingRates then found the 2023 average home value for a 2-bedroom single family residence and then found (2) yearly mortgage for a 2-bedroom SFR by assuming 6% down payment (typical for first time homebuyers according to Rocket Mortgage), 30-year fixed loan, current interest rate as sourced from St. Louis Federal Reserve (6.81%), and typical property taxes. GOBankingRates also found each state’s (3) foreclosure rates as sourced from Sofi for June 2023. All three factors were then scored and combined with the lowest score being best. All data was collected and up to date as of August 1, 2023.

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