10 First Time Buyer Grants & Programs You Should Know About

If you’re buying a home for the first time, it’s an exciting, frustrating, and sometimes overwhelming process. Not only do you have to save up for a down payment, but you also have to learn what you can afford and find a house that falls within that range. Luckily, there are programs to help first-time home buyers, and we’ll go over those below.

 

1. Conventional 97

The Conventional 97 mortgage program requires a minimum FICo score of 620, which makes it a good option for those who don’t have the best credit. It’s a conventional loan that allows a three percent down payment, and this program has no income limitations.

 

2. Downpayment Toward Equity Act

This program provides low-income buyers up to $25,000 to cover closing costs and a down payment. The house they’re buying must be their primary residence, use a mortgage backed by the government, and the buyer must make no more than 20% of the area’s median income.

 

3. FHA

One of the most common home buyer programs that people see is FHA loans. With this program, you must have a credit score of 580 or higher if you have a 3.5% or higher down payment.

 

4. FHA Section 203k

This program helps buyers looking to finance a home that requires rehabilitation and renovations. Instead of having a separate loan for renovations, the program folds it into the mortgage.

 

5. Good Neighbor Next Door

Another HUD program focuses on helping public servants, such as teachers, first responders, and other public servants, buy affordable homes. They must live in a HUD revitalization area and must live there for at least three years.

 

6. HomeReady

Backed by Fannie Mae, HomeReady allows for a 3% down payment, and those who use the HomeReady program receive an additional $500 credit for closing costs. There this a minimum FICO credit score of 620, making it a good choice for those with lower credit scores.

 

7. Home Possible

HomePossible is a program from Freddie Mac that’s similar to HomeReady. One of the differences is that it has a higher minimum FICO score requirement, 660, compared to HomeReady’s 620. It also has a 3% down payment and is available to those with low-to-moderate incomes.

 

8. National Homebuyers Fund

Rather than a government program, the National Homebuyers Fund is a non-profit public benefit corporation that gives people up to 5% of the mortgage amount, but it can also be used as a down payment or for closing costs. You can only apply to the NHF through a mortgage company.

 

9. USDA Loan

One of the qualifications for this loan is that you have to live in a rural community, such as a small town of up to 49,999 people or a metropolitan suburb with fewer than 50,000 people. A USDA loan has a very low mortgage rate and allows for 100% financing for those who have a credit score of 580 or higher.

 

10. VA Loan

A VA loan is only accessible to active military members, veterans of the military, and surviving spouses. This loan program offers 100% financing for those with a 620 FICO score or higher. They can use the loan to purchase any residential property in the country. Some of the benefits of this loan include no mortgage insurance and no down payment, and they can use it multiple times in their life.

 

For more information about which of the programs above are best for you, you can ask our loan officers for advice. Get in touch with us by filling out our online form or calling us at 1-800-332-9221.

 


* Specific loan program availability and requirements may vary. Please get in touch with the mortgage advisor for more information.