The Complete List of First-time Home Buyer Loan Programs
Between student loans, credit card debt, and struggling to save, it might seem like you'll never have enough for a down payment for a house. The good news? There are plenty of programs out there to help you become a homeowner.
FHA loans are great for first-time buyers because they require a much smaller down payment than most other loans. With this program, you're only required to have 3.5% for a down payment instead of the usual 20%. That means if you're buying a $200,000 home, you'll only need a $7,000 down payment instead of a $40,000 one.
VA Loans are explicitly for first-time buyers. In fact, you can use the benefit as many times as you’d like. But since they don’t require a down payment, it can be a great option for a first-time buyer who can’t depend on the equity in their home to cover the down payment cost.
USDA Home Loans
♫ “Oh, give me land, lots of land under starry skies above
Don’t fence me in.” ♫
If the suburbs make you claustrophobic and wide open spaces are your idea of paradise, a USDA loan might be right for you. The program helps low and moderate-income families buy homes in rural areas with the goal of improving the quality of life in those areas. In order to get the loan, you’ll need to contact a qualified lender, but in the meantime, you can learn more about the loan program on the USDA website.
HUD 203(k) Loans
If you’re a handy person and you feel confident you can take on a fixer upper, this might be the program for you. This type of mortgage rolls up the purchase cost of your home and the estimated cost of any home repairs that need to be made, making the total amount of the loan based on the projected value of the home after repairs. The part of the loan that’s designated for the repairs will be put in an interest-bearing account and you can access it throughout your repair and renovation process. There are a few restrictions on the type of home and repair is eligible. The loan also requires you to complete the renovations within six months of buying the home, so don’t go this route if you’re looking for a long-term project.
Good Neighbor Next Door
This loan program is designed to support teachers, police officers, firefighters and other “good neighbors” who want to live and work in a lower-income neighborhood. It's one of many loan programs that support teachers and other public servants.
The Dollar Home program helps low and moderate income families become homeowners. It’s also a way for local governments to focus on specific needs in specific sections of the city. The Otterbein neighborhood in downtown Baltimore was the site of a Dollar Home project in the 1970s. As a result, the neighborhood, located between the National Aquarium and Camden Yards now has some of the highest property values in the city. Dollar Homes are typically sourced from foreclosed homes. Check out the HUD’s list of dollar homes to see if there are any in your city.
With all the programs out there, homeownership is more attainable than you might think. Choose a loan program that sounds like a good fit and then use our mortgage calculator to see how much you can afford to spend on a house.