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This website discusses mortgage programs and how to qualify. Your eligibility may vary based on lender guidelines and investor overlays. Check with your lender for specific details.
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This article was checked for accuracy as of September 19, 2024. Learn more about our commitments to accuracy and your mortgage education in our editorial guidelines.
Updated: September 19, 2024
Government-backed mortgage programs can make homeownership more accessible for first-time home buyers. Mortgages may offer some or all of the following benefits not available to the general public:
This article highlights seven popular loan programs for first-time home buyers to help you choose which first-time buyer mortgage may be best for your American Dream of homeownership.
Popular with: Home buyers with above-average income and credit scores
Conventional 97 is a low-down payment loan backed by Fannie Mae, allowing first-time buyers to make a 3% down payment on a single-family home. Buyers must meet eligibility standards for loan size, credit score, and debt-to-income ratio, and attend a HUD-approved homeownership education course before closing.
Check your eligibility and begin your application now.
Popular with: Home buyers with low- to moderate-income who prefer 30-year fixed-rate mortgages
HomeReady is a 3% down payment mortgage backed by Fannie Mae, designed for buyers with low- to moderate-income. It offers discounted mortgage rates and reduced private mortgage insurance (PMI) premiums. Buyers must complete a homeownership education class before closing.
Popular with Buyers with low- to moderate-income and good credit
Home Possible is a low-down payment mortgage backed by Freddie Mac, similar to Fannie Mae’s HomeReady program. It offers a 3% down payment option and discounted mortgage rates and PMI for eligible buyers.
Popular with: Buyers with lower credit scores and moderate-to-high income
FHA mortgages are government-backed loans with a 3.5% down payment option, offering flexibility for lower credit scores and non-traditional income sources. FHA loans require mortgage insurance premiums for the life of the loan.
Popular with: Buyers in suburban and rural areas
USDA mortgages offer 100% financing and no down payment for buyers in rural and suburban areas. Reduced mortgage insurance premiums and lower interest rates make USDA loans a popular choice for eligible buyers.
Popular with: Buyers with military experience
VA mortgages offer no down payment and no mortgage insurance for eligible military members, veterans, and surviving spouses. VA loans often feature lower interest rates than conventional loans due to government backing.
Popular with: Buyers looking to purchase discounted homes as-is
The HomePath Ready Buyer mortgage allows buyers to purchase foreclosed homes at a discount. Buyers can finance the purchase with a 3% down payment and may qualify for closing cost assistance. Homes are sold as-is, so some may require repairs.
A first-time home buyer generally has not owned a home in the last three years. Exceptions are made for displaced homemakers and single parents.
FHA loans typically have the most flexible requirements regarding credit score and down payment, making them easier to qualify for compared to other loan types.
Home buyers can get pre-approved by visiting a lender or applying online. The process takes minutes and verifies basic income, employment, and credit information.
Yes. VA and USDA loans offer no-down-payment options, and down payment assistance programs may also reduce or eliminate the need for a down payment.
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