{"id":22757,"date":"2021-03-31T09:13:37","date_gmt":"2021-03-31T16:13:37","guid":{"rendered":"https:\/\/www.homelight.com\/blog\/?p=22757"},"modified":"2026-04-08T01:22:43","modified_gmt":"2026-04-08T08:22:43","slug":"buyer-first-time-homebuyer","status":"publish","type":"post","link":"https:\/\/www.homelight.com\/blog\/buyer-first-time-homebuyer\/","title":{"rendered":"The First Time Homebuyer\u2019s Go-To Cheat Sheet: Great Programs, Pro Tips, and Common Mistakes for First Time Homebuyer"},"content":{"rendered":"

Scarce inventory and booming home prices have put increasing pressure on first-time homebuyers, despite low mortgage rates. As these obstacles mount, the share of first-time buyers fell to 31% of home purchases in 2020, down from 33%<\/a> the year prior and marking the lowest share since 1987, according to data from the National Association of Realtors.<\/p>\n

Some of the biggest challenges first-time homebuyers face<\/a> include piecing together the down payment, having a sufficient credit history, and finding the right property. In addition, the large volume of paperwork required to get a mortgage<\/a> can be overwhelming.<\/p>\n

But that doesn\u2019t mean you should shy away from homeownership. You\u2019ll likely find the transition to what may be a roomier and more private abode to be well worth the effort<\/a>, especially post-COVID-19. If you can overcome these roadblocks, your dream home awaits \u2014 and help is out there!<\/p>\n

To give you a leg up on your first-ever home purchase, we\u2019ve put together this guide featuring insights on the variety of programs you may be able to use to make buying a house more attainable, plus pro tips and rookie mistakes to avoid so you can act like you\u2019ve done this before.<\/p>\n

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<\/a> Source: (Stephen Wheeler \/ Unsplash)<\/figcaption><\/figure>\n

Loans and programs available to help first-time buyers<\/h2>\n

As a first-time homebuyer, you don\u2019t have the luxury of using equity from your existing home<\/a> to supplement your down payment. This can make the \u201c20% down<\/a>\u201d you\u2019ve heard as being the norm sound impossible to achieve.<\/p>\n

However, what you may not realize is that the median down payment for first-time buyers in 2020 was actually 7%<\/a>, and certain loan programs make it easier to put less down even with imperfect credit.<\/p>\n

With less than 20% down, you\u2019ll have to pay private mortgage insurance<\/a> on a conventional loan, while government-backed loans come with their own form of mortgage insurance<\/a> for low down payment mortgages.<\/p>\n

That\u2019s an extra cost bundled into your monthly housing payments, amounting to 0.5%-1% of the loan amount annually. But sometimes the cost of this insurance can be worth it if it means expediting the path to homeownership.<\/p>\n

To jumpstart your homeownership journey, start by exploring some of the first-time homebuyer programs at the federal, state, and local level that may be available to you.<\/p>\n

Federal Housing Administration (FHA) loans<\/h3>\n

The U.S. Department of Housing and Urban Development (HUD) created the Federal Housing Administration (FHA) loan program<\/a> in 1934 to help more Americans become homeowners. FHA loans provide the chance to borrow for a home with a low down payment, discounted closing costs, and more lenient credit qualifications<\/a>.<\/p>\n

Major benefits, rules, and conditions:<\/b><\/p>\n