First-time home buyer programs to consider:

February 27, 2019

CONVENTIONAL MORTGAGE
National program

BEST FOR:
Low down payments
Limited mortgage insurance premiums

WHAT YOU NEED TO KNOW:
A conventional mortgage is a home loan that isn’t guaranteed or insured by the federal government. Conventional mortgages that conform to the requirements set forth by Fannie Mae and Freddie Mac allow down payments as low as 3% for first-time buyers or lower-income home buyers. Unlike FHA loans, conventional loans allow borrowers to eventually cancel their mortgage insurance or avoid mortgage insurance altogether if they put at least 20% down.

FHA loans
National program

BEST FOR:
Low credit score
Low down payment

WHAT YOU NEED TO KNOW:

This is the go-to program for many first-time home buyers with lower credit scores. The Federal Housing Administration allows down payments as low as 3.5% for those with credit scores of 580 or higher. The FHA will insure loans for borrowers with scores as low as 500 but requires a 10% down payment for a score that low. Mortgage insurance is required for the life of an FHA loan and cannot be cancelled.

VA loans
National program

BEST FOR:
Military
Low down payment

WHAT YOU NEED TO KNOW:
The U.S. Department of Veterans Affairs helps service members, veterans and surviving spouses buy homes. VA loans are especially generous, providing competitive interest rates,  often requiring no down payment or mortgage insurance. Although there is no official minimum credit score, most VA-approved lenders require scores of at least 640.

USDA loans
National program

BEST FOR:
Low down payment
Rural

WHAT YOU NEED TO KNOW:
A USDA home loan is a zero-down-payment mortgage for eligible rural and suburban home buyers. USDA loans are issued by the U.S. Department of Agriculture through the USDA Rural Development Guaranteed Housing Loan Program. There are income limitations, which vary by region. Applicants with credit scores of 640 or higher receive streamlined processing. Those with scores below that must meet more stringent underwriting standards.

Military Heroes Government Loan Program
State program

BEST FOR:

Military

Low interest rates

Down payment assistance

Closing cost assistance

WHAT YOU NEED TO KNOW

This program also provides 30-year fixed-rate FHA, VA and USDA loans to all qualified veterans and active-duty military personnel, even those who may have recently owned homes. In fact, the Military Heroes loan offers lower interest rates than the Florida First mortgage. Borrowers who qualify for this program can also take advantage of a Florida Housing down payment and closing cost assistance program.

@JulliSells

2 Comments