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Who is Considered a First-Time Homebuyer?

You may be a first-time homebuyer and not even know it. HUD considers anyone who has not owned a home within the last three years a first-time homebuyer. The Federal tax credit for first-time homebuyers ended in September 2010 and is no longer available.

First-Time Home Buyer Qualifications

  • An individual or spouse who has had no ownership in a principal residence during the past 3 years.
  • A single parent who has only owned with a former spouse while married.
  • An individual who is a displaced homemaker and has only owned with a spouse.
  • An individual who has only owned a manufactured home

First-Time Homebuyer Programs by State

Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Puerto Rico/U.S. Virgin Islands
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming

First-Time Homebuyer Loan Programs

HomeReady Loans

The HomeReady loan program is targeted at low-income first-time homebuyers. A minimum credit score of 620 is needed with a 3% down payment. However, your income cannot exceed 100% of the area median income.

  • Minimum 620 credit score
  • 3% down payment
  • Income cannot exceed 100% of area median income

Home Possible Loans

Home Possible loans were created by Freddie Mac to help first-time homebuyers. A 620 credit score is needed with 3% down, you must be a first-time homebuyer and your income cannot exceed 100% of the area median income to qualify.

  • Minimum 620 credit score
  • 3% down payment
  • Income cannot exceed 100% of area median income

HomePath ReadyBuyer Loans

The HomePath ReadyBuyer program was created for first-time homebuyers who want to buy a home listed on hudhomestore.com. A 620 credit score is needed with a down payment of 3%. Buyers can also get a 3% credit for closing cost assistance which does not need to be repaid.

  • 620+ credit score
  • 3% down payment
  • 3% in closing costs assistance

Freddie Mac HomeOne loans

The Freddie Mac HomeOne loan program offers a 3% down payment for qualifying first-time homebuyers with a 620 or higher credit score. HomeOne loans don’t have income limits or geographical restrictions on where the house must be located.

  • 620 credit score requirement
  • 3% down payment
  • No income limits

No Down Payment Mortgages

 

USDA Loans

The USDA home loan program from the U.S. Department of Agriculture is for low-to-median income borrowers buying a home in a rural USDA-eligible location. They offer 100% financing and require a 620 credit score.

  • Minimum 620 credit score
  • No down payment
  • Low 0.35% mortgage insurance premium
  • The home must be in a USDA-eligible location
  • Income less than 115% of the area median income

 

VA Loans

Veterans are eligible for the VA loan program. No down payment or mortgage insurance premiums are needed, most lenders require a 580-620 credit score to qualify.

  • Minimum 580 credit score
  • 100% financing
  • No mortgage insurance required

Good Neighbor Next Door Program

The Good Neighbor Next Door program provides homes for 50% off for teachers, police officers, and EMTs, and provides closing cost assistance. A $100 down payment is required with a minimum 620 credit score.

  • For qualifying teachers, police officers, and EMTs
  • 620 credit score
  • $100 down payment

Native American Direct Loan

The Native American Direct Loan (NADL) is for veterans who are of Native American descent can qualify for a mortgage, renovte, or build a home on Federal trust land. A 580 credit score is required, and they finance 10% of the property so no down payment is needed.

  • The borrower or spouse must be Native American
  • 100% financing
  • Minimum 580 credit score
  • VA home loan Certificate of Eligibility (COE)

 

Low Down Payment Mortgages

 

FHA Loans

FHA loans are guaranteed by the Federal Housing Administration. Borrowers with a 500 credit score are eligible with 10% down, with a minimum 580 credit score a 3.5% down payment is needed.

  • 3.5% down payment with a 580 credit score
  • Maximum 43%-50% debt-to-income ratio
  • For primary residences only

Conventional Loans

Conventional loans are insured by private mortgage companies, not the government. They require a 5%-20% downpayment and a minimum credit score of 620.

  • 5%-20% down payment
  • Minimum 620 credit score
  • Maximum 43% DTI ratio
  • No PMI with 20% down

Conventional 97 Loan

Fannie Mae and Freddie Mac created a 97% loan-to-value (LTV) mortgage loan program that helps first-time buyers achieve the dream of homeownership requiring just a 3% down payment.

  • 3% down payment
  • Minimum 680 credit score

FHA 203k Loans

If you’re in the market to purchase a fixer-upper home, then an FHA 203k loan may be a perfect fit for you. These rehab loans are an extension of the FHA loan program. FHA 203k loans give you money to purchase a property and cash to renovate it with a single loan.

  • 3.5% down payment
  • Minimum 580 credit score
  • Borrow up to 110% of the after repaired value
  • Only for primary residences

FHA Energy Efficient Mortgage (EEM)

FHA’s Energy Efficient Mortgage program (EEM) helps homeowners who want to make energy-efficient upgrades to their home by financing the cost of the property plus up to $25,000 in energy-efficient upgrades. They require a 580 credit score with a 3.5% down payment.

  • Minimum 580 credit score
  • 3.5% down payment
  • Up to $25,000 for energy-efficient upgrades

Chenoa Fund with the FHA Program

Chenoa Funds are a first-time home buyer grant offered by CBC Mortgage Agency (CBCMA), a federally chartered government agency in all 50 states that provide down payment assistance for low-income families whose income is below 115% of HUD’s Area Median Income (AMI).

Chenoa Fund with FHA Qualifications

  • Borrowers making less than 115% of AMI assistance is forgiven
  • 620 credit score needed
  • Mortgage insurance required
  • Depending on your credit score, homebuyer education may be required

 

Chenoa Fund with the HomeReady Program

You can use the Chenoa Fund with conventional 97% LTV loans. Since Chenoa Funds offer 3.5% in down payment assistance and HomeReady loans require 3% down you can use the extra 0.5% to help pay closing costs.

  • Minimum 640 credit score
  • No income limits in low-income census tracts, 100% of area median income (AMI) for all other properties
  • You don’t have to be a first time home buyer
  • Homebuyer education course required

 

HUD Dollar Home Program

HUD (Department of Housing and Urban Development) sells foreclosed FHA homes that have been on the HUD website for more than six months. Local Governments can offer homes to low-income families to help revitalize a community. You can view these eligible HUD homes on the HUD website.