First Time Home Buyer Program
First Time Home Buyer Program
Helping new buyers get into a home with low down payments, local grants, and tax credits.
Why First Time Home Buyer Programs Matter
Buying a first home is the biggest financial step for many households. Specialized programs — from insured loans with low down payments to local down payment assistance and tax credits — are designed to lower upfront costs and make monthly payments more affordable. These programs are offered by federal agencies, state housing finance agencies, counties and cities, and participating lenders.
Popular First Time Home Buyer Program Options
1. FHA loans — low down payment, flexible credit
Federal Housing Administration (FHA) loans remain a leading choice for first-time buyers because they allow down payments as low as 3.5% for borrowers who meet credit guidelines. FHA loans also accept more flexible credit histories than many conventional loans.
2. Down Payment Assistance (DPA) — grants and second-mortgages
Thousands of state, county and city programs provide DPA as grants or low-interest second loans to cover down payment and closing costs. There are over 2,000 programs nationwide — rules and amounts vary by location. Search your state housing authority for programs and income limits.
3. Mortgage Credit Certificate (MCC) — tax credit that lowers monthly cost
An MCC is a dollar-for-dollar federal income tax credit on a portion of mortgage interest paid each year (program specifics and limits vary by state). It can improve your monthly affordability and qualifying income when applying for a mortgage. MCCs are administered by state or local housing finance agencies.
4. Special local/state programs & pilot grants
Many cities and states run targeted programs (examples range from large grants to forgivable second mortgages). For example, major cities and state HFAs publish their own down payment assistance guides and participating-lender lists. Always check your local housing department for new programs.
Who Qualifies as a “First-Time Homebuyer”?
Definitions vary, but commonly a first-time buyer is someone who has not owned a home in the last three years (exceptions often apply for targeted areas or veterans). Income and purchase-price limits generally apply to many assistance programs. Check the specific program rules where you live.
Step-by-Step: How to Use a First Time Home Buyer Program
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Check your credit & budget. Pull your credit reports, estimate monthly housing costs, and set a target price range.
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Find programs in your area. Search your state housing finance agency and local housing department for DPA, MCC, and HFA loan options.
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Get pre-qualified with a participating lender. Many state programs require you to use a lender that participates in their programs.
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Complete any required homebuyer education. Several programs require an approved counseling course to qualify.
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Apply for DPA/MCC simultaneously with your mortgage application. Coordinating both can maximize the benefit and streamline closing.
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Close on the home and follow program compliance rules. Some assistance programs have occupancy, resale, or forgiveness terms you must meet.
Real benefits you can expect
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Lower upfront cash needed (down payment & closing cost help).
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Better chance to qualify with flexible underwriting (FHA).
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Annual tax savings via MCCs (if available).
Common Questions (FAQ)
Q: Do first-time buyer programs affect mortgage interest rates?
A: Some programs (especially second-mortgages or special HFA loans) may come with program-specific rates or fees. FHA loans themselves set lender-level terms; program details vary by lender and locality.
Q: Can I combine a DPA grant with an FHA loan?
A: Yes — many DPAs are designed to be used with FHA loans (and conventional HFA programs). Confirm with your lender and the DPA provider that the combination is allowed.
Q: How much assistance is typical?
A: Assistance ranges from a few thousand dollars up to six-figure grants in rare programs (local caps and eligibility rules apply). Examples vary widely by state and city.
Q: Are there national first-time buyer tax credits now?
A: No broad federal tax credit like the 2008 “first-time buyer credit” exists currently; however, MCCs at the state level provide tax credits for eligible buyers. Stay alert to new federal proposals and state initiatives.
How We Can Help
Ready to see what you’re eligible for? We can review programs and run eligibility scenarios — schedule a free consultation or pre-qualification call today.
