You are reading this article because you searched for the 10 first-time homebuyer programs. Buying a home for the first time can be a bit overwhelming.
You will have to go through the stress of finding an apartment that suits your taste and then saving up some money for a down payment. All of these can be a bit overwhelming, but with the first-time homebuyer programs, your journey will be seamless.
One of the benefits of a first-time homebuyer program is that it helps renters purchase their own home sooner than expected. With tax credits, mortgage rate discounts, and a cash grant, you will be able to purchase your own home sooner.
First-time homebuyer programs are basically for people who have never owned a home before. You can even be qualified for a first-time homebuyer loan.
Most of these first-time homebuyer programs are backed by the government. Others are funded through housing authorities or financial institutions. Each program has its own qualifications. Some involve your credit score, down payment amount, the price of your desired home, income, etc.
What is a First-Time Homebuyer Program?
The essence of a first-time homebuyer program is making homeownership affordable. For people who have never owned a home. First-time homebuyers are entitled to these programs because they assist in purchasing affordable homes.
These programs come in different packages. They offer mortgages with a better interest rate, lower down payment requirements, closing cost assistance, down payments, etc.
Features of First-Time Homebuyer Program
Just like we mentioned earlier, first-time homebuyer programs are just programs organized to help people purchase their first home. These programs come with some features and packages, which they include.
- No-down payment mortgages, which are mortgages that do not require a down payment,
- Mortgage loans with favorable terms based on the buyer’s profession
- Mortgage loans that give interest rate discounts to first-time buyers
- Low-down payment mortgages, which are mortgages that allow a down payment of 5 percent or less.
- Mortgage loans that relax approval standards for first-time buyers
These are what the first-time homebuyer programs include. People who have never owned a home before and would like to own one can get so much from these programs.
10 Best First-Time Homebuyer Programs
As a first-home buyer, you must work alongside professionals who know the types of programs that can help you. They will help you with anything from down payments to closing costs to even mortgage forgiveness. Here are the lists of first-time homebuyer programs that will help you in your homeownership.
1. The National Homebuyers Fund
The National Homebuyers Fund is a nonprofit public benefit corporation. The program is aimed at supporting both first-time home buyers and their mortgage companies.
They provide up to 5% of a home’s purchase price directly to a mortgage company. For a program like this, only specific lenders are allowed to participate.
2. Closing cost assistance programs for homebuyers
This is yet another program that is suitable for first-time homebuyers. This program is suitable for homebuyers because it covers everything. It covers real estate agent fees, mortgage fees, taxes, and title. First-time homebuyers can never go wrong with closing-cost assistance programs.
3. Deferred mortgages
With the deferred mortgage program, there will be no need for you to make mortgage payments on a portion of your mortgage. There will be a need for this as long as you live in the home.
Deferred mortgages are used for closing costs, and they are available for $25,000. However, these deferred mortgages can be paid back, but only when you move out or refinance your home.
4. Down Payment Assistance (DPA) Programs
Down payment assistance programs step in when your credit is good but you are low on cash. State and local government programs provide DPA in the form of down payment loans. DPA is not a free-cash scheme, but the interest rates on the loan are very low.
So, it will be easy for a first-time homebuyer to pay back the loan. If you go for this type of program, it might limit the types of mortgages you can apply for. So it is best that you confirm with your lender what your options are.
5. Bonus #1: Tax credits
This is a very good program for first-time buyers. Though it does not help with the initial purchase, when tax time comes, knocking will go a long way.
A tax credit reduces a buyer’s tax liability when they make some kind of improvement to their home. Such as upgrades to HVAC systems, solar panels, and new windows. First-time homebuyers can get a refund of $15,000 in tax liability.
6. Discounted Homes With HUD
Next on our list is HUD, which means housing and urban development. The HUD links first-time buyers with half-priced homes in their Good Neighbor Next Door program.
Firefighters, emergency medical technicians, teachers, and law enforcement officials are all eligible for this program. This program encourages people to buy homes in the same community where they live and work.
7. Low or No-Down Payment Mortgages
If you are a first-time homebuyer and you still think a 20% down payment is a requirement, then you should change that mentality. Things have changed, and as a first-time home buyer, you can get a down payment of 5% or less. There are a variety of programs that provide options for a lower down payment.
8. Federal Housing Finance Agency First-Time Home Buyer Mortgage Rate Discount
The FHFA First-Time Home Buyer Mortgage Rate Discount is one of the best first-time homebuyer programs, as it slashed rates encourage first-time buyers to be part of the housing market. However, these slashed rates are not available to all borrowers.
Also, to qualify for this rate, you have to be a first-time buyer, and your 30-year fixed-rate mortgage must be backed by Fannie Mae or Freddie Mac.
9. The Downpayment Toward Equity program
The Downpayment Toward Equity Act was introduced by Congress in 2021. Ever since its introduction, it has supported so many people in their quest for homeownership.
This program awards first-generation homebuyers with a sum of $20,000 and an additional $5,000. This award is given to the less privileged who cannot afford to own a home. However, the awards are usually increased if housing costs are high.
10. State And Local Government Cash Grants And Incentives
This is the final first-time homebuyer program on our list. This is a program that offers cash to people so that they can become residents.
Though first-time homebuyers might need to work in a specific industry or meet some guidelines, whatever the case may be, this grant can help with relocation expenses.
How Do You Buy a House If You Have No Money?
It is impossible to buy a house with no money. But first-time homebuyers who do not have money for a down payment can opt for down payment assistance, forgivable mortgages, and housing grants to purchase their desired home.
Who is a First-Time Home Buyer?
A first-time home buyer is a person who has never purchased or owned a home before. They can also be described as a person who has not owned a primary residence in the past 36 months.
Who Qualifies for First-Time Homebuyer Programs?
First-time homebuyer programs are meant for people who have never owned a home before. Some programs look out for people who have never owned a home in the past three years.
How Can I Apply for First-Time Homebuyer Programs?
It’s very simple; all you need is the assistance of your mortgage lender. They will help you determine whether you are qualified for a first-time homebuyer program. And if you are qualified for a first-time homeowner program, they will help you apply for one.