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Dan Green
Dan Green

Dan Green

Homebuyer.com

Dan Green has helped millions of people achieve their American Dream of homeownership. Dan has developed dozens of tools, written thousands of mortgage articles, and recorded hundreds of educational videos. .

Dan Green

Dan Green

Homebuyer.com

Dan Green has helped millions of people achieve their American Dream of homeownership. Dan has developed dozens of tools, written thousands of mortgage articles, and recorded hundreds of educational videos. .

Happy First-Time Home Buyers Sit In The Sunny Living Room

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.

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Trusted Content

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

7 Popular Mortgages for First-Time Home Buyers

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:

  • Automatic mortgage rate discounts
  • Low-down payment mortgage options
  • Reduced mortgage insurance premiums

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.

1. Conventional 97 Mortgage

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.

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2. HomeReady Loan

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.

3. Home Possible Loan

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.

4. FHA Mortgage

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.

5. USDA Mortgage

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.

6. VA Loan

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.

7. Fannie Mae HomePath Ready Buyer Mortgage

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.

Common Questions About First-Time Home Buyer Mortgage

Who qualifies as a first-time home buyer?

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.

What is the easiest house loan to get?

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.

How do I get pre-approved for a loan?

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.

Can I buy a house with no down payment?

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.


Changelog

  • April 10, 2024: Added information about the First-Time Homebuyer Act of 2024; Updated information about the $10,000 First-Time Home Buyer Mortgage Credit Relief program.
  • March 25, 2024: Updated references to the $15,000 Biden First-Time Home Buyer Tax Credit to reflect the updated proposal, which gives eligible first-time home buyers a $10,000 mortgage relief credit; Added new introduction and excerpt.
  • November 30, 2022: Original publish date

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