As mortgage rates swing upwards along with inflation, it can be discouraging to wonder if homeownership can ever be a real possibility. What’s more, as housing costs increase, many people are choosing to relocate, even change careers to move to areas with more affordable housing and a balanced lifestyle. But there’s good news for first-time homebuyers! Keep reading to learn first-hand about the benefits and advantages that are available to you.
Even if you’ve owned a home before, many repeat homeowners can still qualify as first-time homebuyers right now, so keep reading to see if you’re eligible. Homeownership might be closer than you think.
One of the best early moves you can make is to get pre-approved and lock in your mortgage rate.
How to Qualify as a First-Time Home Buyer
According to the U.S. Department of Housing and Urban Development (HUD), a first-time homebuyer meets any of the following conditions:
- An individual who has not owned a principal residence for at least three years.
- An individual who has owned a home (but their spouse has not) can still purchase a new home together as first-time homebuyers.
- A single parent who has only owned a home with a former spouse while married.
- A displaced person who has only owned a home with a former spouse while married.
- An individual who has only owned a principal residence not permanently affixed to a permanent foundation (following applicable regulations).
- An individual who has only owned a property that was not in compliance with state, local, or model building codes, and cannot meet compliance for less than the cost of constructing a permanent structure.
Top Mortgage Benefits for First-Time Home Buyers
A few highlights:
- Down payments as low as 3.0%
- Use of gift funds to help with closing costs
- HUD-issued grants and down payment assistance
- Government-backed loans with lower interest rates
- Withdraw IRA funds for use without penalty
- Tax deductions for points and origination fees
Many first-time homebuyer programs allow you to use gifted funds from family or friends, withdraw from retirement funds without a penalty, and even access down payment assistance. Talking with a mortgage expert can help you get access to the best options based on your goals.
Related: How to FAST TRACK your mortgage pre-approval
Top Home Loans for First-Time Home Buyers
One of the biggest obstacles for a lot of first-time homebuyers is the down payment. These popular first-time homebuyer mortgages can help lower your down payment and get you into a house without massive fees or unexpected costs:
- FHA Loan – 3.5% down payment
- VA Loan – 0% down payment
- USDA Loan – 0% down payment
- Conventional 97 Home Loan – 3% down payment
- HomeReady Home Loan by Fannie Mae – 3% down payment
- Good Neighbor Next Door Program – $100 down
- 203(k) Section Loans – 3.5% down payment
Connect with your local mortgage advisor and start your application and get pre-approved for your best home loan.
Depending on your unique situation (including your employment status and credit rating), there are custom solutions that can take advantage of government-backed loans, get you super low rates and save you money.
You can finally stop renting and start building equity in your first home. Homeownership is possible.
Down Payment Assistance for First-Time Home Buyers
FHA grant and loan programs and down payment assistance programs are available across the country, and many are state-specific.
Find out more about FHA Home Loans and Down Payment Assistance programs that are offered to first-time homebuyers available in 2021 in your state: find your state.
You can even learn about government programs that make it easier to purchase a home. Go here to check information on vouchers, state programs, and even foreclosures in your state.
If you’re dreaming about buying a home and you’re curious to see if you qualify for first-time homebuyer advantages, start the process today by connecting with your local mortgage advisor. Talk with your advisor and ask them to show you which home loan programs will give you the best advantages. Getting pre-approved early on can help you move fast when you find your dream home. We’d love to help.