Top 10 first-time home-buyer programs
Buying a home can be overwhelming for those who’ve never ventured into the real estate market. There are many different steps, options, websites, and agents; finding your forever home can become a confusing and stressful mess. While the process may seem intimidating, there are plenty of programs out there that will help you get everything you need to buy your very first home.
- Neighborhood Assistance Corporation Of America
NACA is a non-profit, nationwide program that helps low-income families with buying their first home. They provide mortgage counseling and education for financially unstable families to find lenders who can work with them. NACA’s loans don’t require any closing costs, down payments, or minimum credit score. Their primary goal is to build strong neighborhoods in urban and rural areas across the nation through affordable homeownership, giving everyone the chance to have a forever home.
- Good Neighbor Next Door
This program offers its services to teachers, law enforcement officers, firefighters, and emergency medical technicians. The HUD sponsors this program, and qualified applicants can receive up to 50% off on a home located in revitalization areas. Buyers also have to live on the property for at least 36 months to qualify.
- Energy Efficient Mortage Program
If you’re looking for an energy-efficient home and are on a budget, this might be the program you need. This program isn’t specific to first-time buyers, and it’s backed by FHA and VA loan programs. These loans will help cover the costs of making your home more energy-efficient without affecting your down payment, making it a good program for those looking to be more environmentally friendly but may be hard up on cash.
- Habitat For Humanity
Habitat for Humanity is a nonprofit organization offering its services to low-income families. Their goal is to provide sustainable and affordable homes for people in need to break the cycle of poverty and strengthen communities. Volunteers will build homes for those in need and make no profit on the house after you close. With 800,000 homes built, they are the largest non-profit home provider in the world.
- HomePath ReadyBuyer Program
The HomePath ReadyBuyer program offers to cover up to 3% of closing costs on foreclosed homes to first-time home buyers. These homes are sold as-is so expect there to be possible repairs or renovations necessary. To qualify, applicants must take and pass Fannie Mae’s framework homeownership course.
- Dollar Homes Program
Run by the Department of Housing and Urban Development, this program claims to offer homes for $1 along with closing costs. Dollar homes partner with governments and nonprofits to purchase these homes to provide them to low or moderate-income families. The homes available have been foreclosed on, and to qualify, you must cover rehabilitation costs.
- State and Local first-time buyer programs
Most homebuyer programs can be found locally. These programs vary in what they offer, but it’s worth seeing what your specific state might offer and what kind of assistance they provide to first-time buyers. The HUD website offers a complete list of state-specific home buying resources.
- FHA Loan
The Federal Housing Administration provides this loan, and it is an excellent fit for those looking to buy a home for the first time whose credit score might be struggling. Buyers in the credit range of 580 can get a loan with just 3.5% down. If your credit score falls below that, they offer a 10% down payment. To be eligible for this loan, you will need to pay mortgage insurance premiums for as long as you have the loan to protect the lender against default.
- USDA Loan
Are you looking to live in a rural area? If so, the U.S. Department of Agriculture offers 0% down payment loans if you meet specific income requirements. The USDA Loan allows applicants to build, renovate, or relocate a home to any qualified rural location. Applicants may receive up to 100% of the home’s value through this loan.
- VA Loan
Service members, veterans, and surviving spouses who meet debt and income requirements qualify for this loan. The U.S. Department of Veterans Affairs requires no down payment or mortgage insurance; borrowers may also be offered lower interest rates than traditional loans. The VA loan is a great way to get the funds necessary for your first home. However, receiving approval might take longer, as is customary for most military affairs.
With these resources, buying a home can be a lot easier. From lower interest rates to cheaper down payments, there are plenty of options for the first-time homebuyer.