Low Down Payment Options for First-Time Home Buyers
You are considered a first-time homebuyer if you haven’t had any form of ownership in any home in the last three years. This means, you may still be eligible as a first-time homebuyer even if you owned a home at some point in the past. If you own investment property will not qualify as a first-time homebuyer. Here are three options that first-time home buyers have that may allow for a lower down payment.
Verify your mortgage eligibility (Apr 27th, 2024)FHA Loans
This government-backed mortgage is attractive for first-time home buyers, but you don’t have to be one to qualify.
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Credit score requirements are lower
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A lower down payment (as little as 3.5%)
Verify your mortgage eligibility (Apr 27th, 2024) -
Bankruptcy or other financial issues on your credit history may be allowable
Keep in mind that…
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You will have to pay mortgage insurance for an FHA loan
Verify your mortgage eligibility (Apr 27th, 2024) -
The home must be a primary residence
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There are different FHA loan limits in each county
VA Loans
Only eligible for veterans, service members, and qualifying surviving spouses. It is another government-backed loan (backed by the U.S. Department of Veterans Affairs – VA).
Verify your mortgage eligibility (Apr 27th, 2024)-
As little as 0% down
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Flexible for borrowers who may need easier credit score requirements
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You will need to provide a Certificate of Eligibility (COE)
Verify your mortgage eligibility (Apr 27th, 2024)
Keep in mind that…
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There is a VA funding fee that is a percentage of your loan amount (can be waived for disabled Veterans)
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You will need to meet reserve requirements
Verify your mortgage eligibility (Apr 27th, 2024) -
The home must be a primary residence
Local Homebuyer Programs
Some counties and cities may offer a first-time homebuyer program. They are typically aimed to assist low to moderate-income residents, including employees at nonprofit organizations, teachers, healthcare professionals, and county/city employees.
You can find local homebuyer programs on your county or city websites.
Navigating these programs can sometimes be overwhelming with lender overlays. Working with a mortgage broker can provide you with multiple options and help guide you during the mortgage process. Get pre-approved with one of our loan officers today to start your homebuying journey.