{"id":24385,"date":"2021-05-28T12:08:52","date_gmt":"2021-05-28T19:08:52","guid":{"rendered":"https:\/\/www.homelight.com\/blog\/?p=24385"},"modified":"2024-05-29T10:36:19","modified_gmt":"2024-05-29T17:36:19","slug":"buyer-first-time-home-buyer-government-programs","status":"publish","type":"post","link":"https:\/\/www.homelight.com\/blog\/buyer-first-time-home-buyer-government-programs\/","title":{"rendered":"Need Help Buying a Home? Here are 13 First Time Home Buyer Government Programs"},"content":{"rendered":"

If you\u2019re buying a home for the first time, it sure would be nice to get a little help. Saving up for a down payment<\/a> plus closing costs<\/a> \u2014 and don\u2019t forget the movers \u2014 can be intimidating. But it can be hard to know where to look for help.<\/p>\n

Chiquita Pittman<\/a> is an experienced agent in New Jersey, where she sells 20 more condos than the average agent. She conducts first-time homebuyer webinars for the state quarterly, and she says that most states have some really great programs where first-time homebuyers can combine the grant money from the state with other grants and \u201ccan really buy a house for very little money down.\u201d<\/p>\n

If you\u2019re ready to buy, what kind of first-time homebuyer<\/a> government programs are available?<\/p>\n

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<\/a> Source: (Ryan Quintal \/ Unsplash)<\/figcaption><\/figure>\n

Down payment assistance<\/h2>\n

You should be able to find some form of down payment grants and loans<\/a> to help first-time homebuyers<\/a>, either at the state or local level. A simple internet search with the keywords \u201cdown payment + first time homebuyer + your state\u201d should get you started.<\/p>\n

In Pittman\u2019s state of New Jersey, the state offers a $10,000 interest-free, forgivable loan to qualifying first-time homebuyers. If the buyer stays in the property five years or more, they don\u2019t have to pay it back. The program requires that borrowers take an online course about budgeting and home ownership.<\/p>\n

Pittman is a big fan of the online courses because a home is, \u201cthe biggest investment [they\u2019re] going to make in their life.\u201d She thinks these courses set homeowners up for success.<\/p>\n

\u201cKnowledge is power, so we try to get them as much information as we can in the beginning,\u201d to help them understand the responsibilities of homeownership.<\/p>\n

Some states also offer down payment loans, which must be repaid. For example, the state of Massachusetts<\/a> gives first-time homebuyers up to 5% of the purchase price, or $15,000 (whichever is less) toward their first home. This fixed-rate loan has a 2% rate, and either comes due when you sell or refinance, or after 15 years.<\/p>\n

Closing cost assistance<\/h2>\n

Closing costs<\/a> can run between 2% and 5% of the home\u2019s total purchase price. If you\u2019re a first-time homebuyer, you might not have realized that you needed to save enough to cover them, too. Getting help paying them could save you thousands of dollars.<\/p>\n

States and charities also offer closing cost grants, which you can sometimes combine with down payment assistance. Search for a HUD-approved local or state housing commission to find out what\u2019s available, or check out this list<\/a> on their website.<\/p>\n

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<\/a> Source: (Christina @ wocintechchat.com \/ Unsplash)<\/figcaption><\/figure>\n

Government-backed mortgage loan assistance<\/h2>\n

The federal government has also established programs to help first-time homebuyers realize their dream of homeownership. They\u2019ve created programs to help veterans, firefighters, Native Americans, and more.<\/p>\n

Even if you don\u2019t fall into one of those categories, you could find a cheap home through HUD or buy a home with a low down payment through the Federal Housing Administration (FHA<\/a>).<\/p>\n

Researching first-time homebuyer government programs could help you buy sooner.<\/p>\n

FHA loans<\/h3>\n

The FHA offers loans<\/a> that help first-time homebuyers with lower credit scores and down payments. You can receive an FHA loan<\/a> with a credit score as low as 500 if you have a 10% down payment, or you can put down as little as 3.5% if you have a credit score of 580 or above.<\/p>\n

The FHA partners with approved lenders to back these loans, serving as a guarantor. You can find an approved lender in your area by searching on the FHA website<\/a>. You will have to carry mortgage insurance<\/a> if you go this route.<\/p>\n

VA loans<\/h3>\n

The Department of Veterans Affairs offers VA loans<\/a> to qualified veterans. If you\u2019re a service member, veteran, or eligible surviving spouse you can qualify for a loan. You must meet minimum income and credit score requirements which are set by the lender who partners with the VA. Typically, the minimum credit score to secure a VA loan is at least 620.<\/p>\n

You\u2019ll usually get a competitive interest rate, and there\u2019s no down payment requirement. With a conventional loan, if you put less than 20% down, lenders require that you carry a private mortgage insurance policy<\/a>. This policy helps mitigate their risk and would pay out to them if you defaulted.<\/p>\n

But with a VA loan, you won\u2019t have to pay for mortgage insurance \u201cMI,\u201d which can add hundreds of dollars to your monthly payment.<\/p>\n

USDA loans<\/h3>\n

The U.S. Department of Agriculture also has a mortgage loan program. Before you think \u201cI don\u2019t want to be a farmer!\u201d \u2014 don\u2019t worry. While the USDA does only lend in certain areas, its coverage map<\/a> often overlaps with the suburbs.<\/p>\n

If both you and the property you want to buy qualify, then you can secure a mortgage on a home with no money down. Interest rates can be as low as 1%. Requirements include:<\/p>\n