Being a first-time homebuyer can be both exciting and financially worrisome. Factors like credit scores and down payments may make it hard for you to qualify for a loan. However, several first-time homebuyer grants and loan programs are available, allowing many people to save a significant amount of money when buying a home.
Grants are funds you do not have to repay at any time in the future as long as you meet the qualifications for them. Loan programs with low down payments or lower interest rates can help you obtain the loan you need with more competitive features.
The following are some of the first-time homebuyer loan programs available. To obtain these, you will need to contact a lender and apply through their application process. You can also use the links below to help you find the perfect solution for your needs.
First-time homebuyers may have a number of options when applying for a home loan. For the following programs, you’ll find a mortgage lender you want to work with and apply directly through that lender. There is no separate application process:
A Down Payment Assistance program could help you save a significant amount of money. These programs are nearly always locally focused, or they may be state programs. They allow you to apply for the program, and if you meet the requirements, such as buying a home in a designated area or you have a lower income, you do not have to repay the down payment.
The key here is that every state is very different, and most states have numerous programs. The best resource for all available local homebuying programs in your area is the US Department of Housing and Urban Development. On their website, there is a list of state-specific programs. Just click on your state to get started.
A traditional conventional loan could require a 5 to 20% down payment from the home buyer. There are various options to work around this, including specific low down payment conventional loans specifically designed to reduce that financial risk.
One of the best resources for this is the Home Possible loan program supported by Freddie Mac. It can help you find a loan program that fits your specific needs with no or very low down payment requirements.
Also consider the Conventional 97 Mortgage, which is a government-backed loan program that allows you to buy a home with just 3% down if you meet the credit score requirements. You will need to purchase private mortgage insurance to qualify, which you will need to maintain until you pay down your mortgage to under 80% of the home’s value.
A first-time homebuyer grant is a resource for anyone who qualifies. Grants are never paid back. You can use the funds from a grant to help you build your down payment or to cover the closing costs of the loan, depending on what specific elements the grant is written for and how well you qualify. The following homebuyer grants for first-time homebuyers include the following.
You may qualify for up to 5% of your home’s purchase price to cover down payment and closing costs. Choose a mortgage lender that participates in the program that will forgive the funding.
How to Apply for the Grant:
Visit NHFloan.org to find a list of programs available to you in your state.
Who Qualifies:
Anyone may qualify, even those who are not first-time homebuyers, if they qualify for a loan through one of the applicable lenders.
You may qualify for up to $10,000 to use as a down payment through one of two grant programs available from Wells Fargo, the “Homebuyer Access Grant” or the “Dream. Plan. Home. Credit.”
How to Apply:
Visit Wellsfargo.com/mortgage/down-payment-help to apply online.
Who Qualifies:
Purchase a home using the Wells Fargo loan with qualified financing in one of the prime metro areas it is servicing, including Atlanta, Baltimore, Charlotte, Dallas, and Minneapolis-St. Paul, New Jersey, New York, Philadelphia, or Washington, DC. Typically, this program is available to lower-income borrowers.
For those who are law enforcement officers, firefighters, emergency medical technicians, teachers, or other public service-oriented professionals, the Good Neighbor Next Door Program from the US Department of Housing and Urban Development could be ideal for you. It offers up to a 50% discount on homes in specific revitalization areas.
How to Apply:
Visit the US Department of Housing and Urban Development website
Who Qualifies:
Buy a home in a recognized revitalization area by HUD and live there for three years.
The HomePath Ready Buyer program from Fannie Mae allows borrowers to obtain 3% off their home’s purchase price to cover closing costs, as well as potential other savings if they purchase a home owned by Fannie Mae.
How to Apply:
Learn more at Fanniemae.com
Who Qualifies:
Purchase a Fannie Mae-owned home. Most of these properties are foreclosures, with some needing significant work to bring them up to standard.
The HomeReady and Home Possible conventional loan program could help you qualify for a grant of $2,500 if your income is within the requirements. This program may only be available through February of 2025 unless renewed.
How to Apply:
Visit FannieMae.com to learn more
Who Qualifies:
Your income has to be 50% or less than the median income for your area to qualify.
If you are considering buying a home for the first time, any of these first-time homebuyer programs could be an option for you. Turn to your lender to exhaust all possibilities before you make any buying decision.