First Time Home Buyer Information

Owning a home is part of the American dream. However, residents who have never owned a house before may find the process daunting and overwhelming.

Fortunately, first time home buyer programs are available to make the process easier. Moreover, a number of these programs seek to reduce the financial stress of obtaining a mortgage for the first time.

For instance, they make it possible for Americans to participate in first time home buyer programs with bad credit. 

First time home buyer government programs comprise the majority of lenders that offer programs for first-time home buyers.

These lenders include the U.S. Department of Housing and Urban Development as well as the Federal Housing Administration. These organizations help Americans afford their first home by decreasing their financial barriers to entry such as down payments.

However, prospective home buyers must still meet certain requirements before they can receive their home loan. Continue reading below to more about qualifying and applying for first time home buyer programs. 

There are a variety of first time home buyer government programs for Americans to apply for. HUD and the FHA are the largest entities that provide assistance for new home buyers.

Details about the programs they offer are expanded in later sections of this article, but essentially they assist a variety of new home buyers with affording their down payments and closing costs.


What are the best-rated first time home buyer government programs?

About VA Home Loans

The Department of Veterans Affairs (VA) also offers a variety of home loan assistance programs for active and retired service members. However, unlike other first time home buyer programs, VA home loans are not offered directly by the department.

Rather, the VA backs home loans up to a certain amount for qualifying service members and their families. Additionally, VA purchase loans enable military members to buy their homes without a down payment or mortgage insurance.   

About USDA Loans

Furthermore, the U.S. Department of Agriculture (USDA) offers a unique program for residents who plan to purchase property in USDA-approved rural areas.

Moreover, this program requires applicants to meet certain income limits. Essentially, only low to extremely low-income applicants are provided USDA home loan assistance.  

About HomeReady HomePath

The HomeReady HomePath program is the fifth option for new home buyers. Like other programs, HomeReady enables residents to purchase a home with a low down payment and receive 3 percent toward closing costs for completing a home buyer education course.

The best first time home buyer programs depend on how well a specific program can meet the needs of the home buyer. As a result, there is no one program that is best for all prospective first-time home buyers. Moreover, different programs serve different types of applicants.

For example, the Department of Veterans Affairs assists home buyers who are current or former military members.

Because the VA focuses its efforts on service members, it will likely offer the best options for those specific residents and be able to address their barriers to entry.

Therefore, the best home loan program for veterans and those on active duty is likely one that is offered by the VA.

While other first time home buyer government programs, such as FHA or USDA home loans, may also be suitable for service members, they may not address their issues as well as the VA can. On the other hand, low-income homebuyers may not find that FHA loans accessible.

However, HUD may have better mortgage options and rates as the department focuses its efforts on assisting low-income residents find permanent housing solutions. 

How do I apply for HUD first time home buyer programs?

In order to participate in any HUD first time home buyer programs, prospective home buyers must apply with their local housing counseling agency. There, interested home owners can obtain information and details about how the Department of Housing and Urban Development can help.

Eligibility and the types of programs available vary in each state. Thus, prospective home buyers must visit their housing counseling agency to learn more about the steps they need to take. 

One popular home loan program offered by HUD is the Good Neighbor Next Door program. Residents who qualify receive a large discount off the price of their home.

However, their chosen home must be in a revitalization area and they must make a commitment to live on the property for a minimum of 36 months. 

How do I apply for the FHA first time home buyer program? 

In order to apply for an FHA first time home buyer program, residents must visit an FHA lender. This is because all home buyers are required to apply for mortgages in person.

Your lender will ask you to provide a number of identifying and financial documents to check your eligibility. 

In addition, each state has different FHA programs and options, meaning that a centralized application portal is not available for all Americans.

Can I participate in first time home buyer programs with bad credit?

Many Americans who are looking to buy their first house worry that they will not qualify for first time home buyer programs with bad credit. However, there are options for prospective buyers with low credit scores.

In fact, being a first-time home buyer can make it easier to obtain a mortgage with reasonable terms and rates than it would be for an experienced home buyer.

First time home buyer government programs can offer new home buyers better rates for their low credit scores than conventional home-buying programs and lenders.

For instance, borrowers with credit score of 580 or more qualify for a 3.5 percent down payment with the FHA. Those with even lower scores can still qualify as long if they pay a 10 percent down payment.  

Another option that residents with bad credit have is to improve their credit before seeking out mortgage loans. A higher credit score will enable mortgage applicants to qualify for better rates and terms. As a result, they may end paying less over the length of their loan.

While the decision is ultimately up to the home buyers, it is important to remember that a home is a large financial investment and should be carefully considered.

Find Out About Grants for First Time Home Buyers

Local and government grants for first time home buyers help more families become homeowners.

Grants can serve to provide funds for several different home buyer-related expenses, including closing costs, down payments and other costs. 

Unlike a loan, first time home buyer grants do not generally need to be repaid. These grants can be an essential part of purchasing a home for low- and middle-income families, especially if a family has struggled to save for a down payment.

Down payment requirements can average between 10 and 20 percent of a home’s purchase price. For many, this is simply too high a cost to afford. 

By exploring grant options, you will provide yourself the opportunity to better prepare yourself for the purchase of a home as well as determine whether or not these grants will help you afford a home.

Becoming a homeowner is a significant investment and it is one that should be made with great care and consideration. 

How does a first time home buyer grant program work?   

First time home buyer grant programs provide qualifying families and individuals with funds that may be used towards the purchase of a home.

These funds do not need to be repaid, so long as they are allocated towards their intended purpose and all grant requirements are met. 

While each first time home buyer grant program is different, there is a limit to the amount of financial assistance that you can receive from each program. This amount may be percentage based or a set dollar amount.

However, there are several factors that will determine the actual amount that you may be awarded, including factors such as your income and the purchase price of the home. 

What expenses do first time home buyer grants pay for?

First time home buyer grants vary by the programs that provide them. Depending on the type of grant you qualify for, you may be able to allocate funds towards expenses such as: 

  • Closing costs.
  • Down payments. 
  • Renovations or repairs to a home that you are purchasing. 

Therefore, it is essential that you review each available grant program carefully to determine how the grant can benefit you.

How to Qualify for First Time Home Buyer Federal Grants

Local and government grants for first time home buyers are only available to those who qualify. Each grant program will include specific eligibility requirements that must be met in order to receive financial assistance. 

While these requirements vary between grant programs, most grant programs include some form of income-based qualification. Generally, you must have low to moderate income to qualify for financial assistance when purchasing a home for the first time.

As the name suggests, grants for first time home buyers are only available to those purchasing a home for the first time. 

Review Ownership Requirements for First Time Home Buyer Grants

When reviewing first time home buyer grant programs, it is essential that you determine whether or not a grant will call for you to meet ownership requirements.

For example, several grant programs will require you to occupy the home as your primary residence for a specified period of time. 

It is essential that you comply with all ownership requirements. Should you violate these requirements or any other regulation for the grant program, the financial assistance that you receive could be converted to a loan.

If your grant is converted to a loan, you will be required to repay the amount plus any additional interest that you accrue. 

How to Get First Time Homebuyer Grants

In order to learn how to get first time homebuyer grants, it is essential that you review the common types of grants that you may qualify for. Each grant program is provided by a different entity, making application processes and eligibility requirements vary between programs. 

About the Good Neighbor Next Door Program

While not strictly a first time home buyer grant program, the Good Neighbor Next Door program can provide substantial discounts on the purchase of an HUD home.

This program is available in specific communities in a revitalization effort put forth by the U.S. Department of Housing and Urban Development (HUD). 

You must be willing to live on the property for at least 36 months (three years) and you must have a career in one of the following professions to qualify for a grant: 

  • Law enforcement. 
  • Firefighter. 
  • Emergency medical technicians (EMTs).
  • Teacher (pre-k through 12th grade). 

If qualified, this grant provides up to 50 percent off the price of an HUD home. 

About the National Homebuyer Fund (NHF)

The NHF offers a first time home buyer grant program that assists with down payments for a mortgage. This low-income assistance program provides qualifying applicants with up to five percent of a loan amount. For example, if the home you wanted to buy was $100,000, the NFH would provide $5,000. 

While most mortgages require a down payment of at least 10 percent, NHF provides invaluable assistance by cutting down the amount that prospective homeowner’s need to pay. 

About the First Home Club from Quontic Bank

In addition to seeking first time home buyer grants, it is worth taking the time to review programs that will help you save for a down payment.

First Home Club provides an attractive down payment program that provides you with four dollars for each dollar that you save (up to $7,500) towards a down payment. 

While this program can make it far easier for you to save for a down payment, the program is not without its downside. The program requires you to have a Quontic savings account and, to take advantage of the additional savings, you must have your mortgage funded by Quontic. 

About Local Grants for First Time Home Buyers

While there are few government grants for first time home buyers on a national level, local and community-based grant programs are often far more abundant.

Therefore, it is essential that you contact your local and state government agencies to determine what grant programs are offered within your area. Additionally, you can check with your local lenders for additional information on grants you may qualify for. 

How to Get Help Finding Local and Federal Government Grants for First Time Home Buyers

You can get help finding first time home buyer grants that you qualify for by contacting lenders within your local area. Often, speaking with a local lender can help you to find more grants than reviewing options on a national level.

Local lenders have likely worked with grant programs before and may know of additional programs that are offered within your community that you have not yet heard of.