Buying your first home is overwhelming. It’s hard to know which programs are out there, and what ones are best for you. It’s okay to feel unsure of where you stand; we’re here to help guide you in the right direction. Learning about these homebuying programs for first-time buyers is a great place to start.
The FHA Loan
FHA loans have low-interest rates, small down payments, and low closing costs compared to conventional loans. The Federal Housing Association (FHA) insures the loan, so lenders don’t lose out if your loan goes into default. If your credit score is 580 or higher, your down payment could be as low as 3.5 percent with an FHA loan.
The USDA Loan
A USDA loan is a homebuyer assistance program awarded by the U.S. Department of Agriculture for homes in rural areas. USDA loans are fixed (meaning your payments remain the same for the duration of your loan), but you may not have to put a down payment on your home with this loan.
The VA Loan
This loan is for active duty military members, veterans, and their surviving spouses. The U.S. Department of Veteran Affairs awards VA loans. VA loans have low-interest rates, don’t require a down payment, you don’t have to pay PMI (Private Mortgage Insurance), and there is no credit score minimum needed.
Good Neighbor Next Door Loan
If you’re a law enforcement officer, teach pre-k through 12th grade, a firefighter, or emergency medical tech, then this loan is for you. The Good Neighbor Next Door program is awarded by HUD (U.S. Department of Housing and Urban Development), and homebuyers receive a 50% discount on the listing price if the house is in a revitalized area.
Check your state’s website to see what housing programs and grants are available. Many states offer help provided by the government to first-time homebuyers. For example, FirstHomes100 is a program in Rhode Island that offers 100 percent financing, no down payment, no PMI, and closing cost assistance. The right program is out there, you just have to find it!