Special Programs for First Time Home Buyers

Robin Hill Last Updated Aug 06, 2019 (0) comment , , , , ,

You will be happy to know that there are, in fact, several special programs for first time home buyers! For many, homeownership is the most important goal of making their dreams come true. Most adults begin working toward this goal even while they are still young adults. Because buying a home is a large purchase, most people need to obtain a mortgage or home loan.

In terms of first time home buyer down payment, you are taking this first big step without any equity already built up in a current property, which usually means coming up with a large down payment in cash. This can be very daunting for many first-time homebuyers, which may leave you wondering if there are special deals or programs for first time home buyers. Below are several of your options.

Special Programs for First Time Home Buyers

FHA Loan

Chances are you’ve probably at least heard of an FHA loan. FHA loans are a popular resource for aspiring homeowners, primarily because of its offered first time homebuyer benefits. Not only do they only require 3.5 percent for a down payment, but they also are more lenient on your credit score. However, FHA loans do require the buyer to pay for mortgage insurance at the time of closing and on an annual basis. That cost is usually added into your monthly mortgage payment. Mortgage insurance protects the lender because the buyer has less motivation not to default on the loan.


USDA loans also referred to as Rural Development Loans, are another great option for first-time homebuyers, especially if you’re looking at homes in a more rural location. Often, rural doesn’t mean miles and miles away from civilization, but perhaps a small town outside of a large city. USDA loans accept lower credit scores and often provide 100 percent financing, meaning you would not have a down payment at all. There are restrictions, however, that the buyer must have a lower to moderate income for the area and only certain areas are eligible.

VA Loan

VA loans for active-duty military and veterans that are eligible for VA benefits are a great option for first-time homebuyers. No down payment is required and although there is a funding fee, it can be rolled into the loan, so it doesn’t have to be paid upfront. Additionally, there is no minimum credit score and no mortgage insurance required. On top of all of that, VA loans usually have lower interest rates than other loans and if your financial situation becomes difficult at some point, the VA can assist you by negotiating with your lender on your behalf.

Good Neighbor Next Door

If you are a teacher, firefighter, EMT or in law enforcement, the Good Neighbor Next Door loan may be the right loan for you. Not only can it be combined with any financing option or cash, but there are also homes available with extreme discounts. While you are required t to live in the home for 36 months, if you choose to sell your home after that time period, you can keep any profits. Be mindful that the homes will be sold “as-is” and they are only available for a limited time.

In addition to these programs, you should also check with several different lenders for Local First-time Homebuyer Programs and Grants that may be available to you as well!

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