Being a first-time home buyer in the market today means you are facing some of the toughest real estate conditions in recent history. Pickings are getting slimmer and the wallets aren’t necessarily getting fatter.
But just because the market might be a bit of a challenge, it doesn’t mean that being able to purchase should also be challenging. Thanks to the help of national and state-wide first-time homebuyer programs, first-time homebuyers can reap the benefits of things like lower down payments, reduced closing costs, and fixed-rate mortgages, making homeownership more accessible for everyone.
So, wondering what first-time homebuyer assistance programs are available to you? I thought so. That’s why I’m going over all the options below – from national programs like FHA and VA loans to state-specific programs that can benefit you locally.
What are homebuyer state programs?
Each state has its housing authorities, which are independent agencies with strong relationships with state and federal governments. The housing authorities are chartered under state law and function as non-profit, autonomous public entities.
These housing authorities receive subsidies from the federal government’s HUD (Housing and Urban Development) each year and offer special deals and programs to state residents who are looking to buy a home.
These programs will differ state by state, but some of the most common home buyer state programs include conventional mortgages, advantages, down payment and closing cost assistance, local heroes loans, and special tax credits.
Here are the programs, listed by state:
Alabama Alabama Step Up, Alabama Mortgage Credit Certificates
Alaska Tax-Exempt First-Time Homebuyer Program, Taxable First-Time Homebuyer Program, Interest Rate Reduction for Low-Income Borrowers Option, Manufactured Home Program, Closing Cost Assistance Program
Arizona Home Plus Loan
Arkansas ADFA Move-Up Loan Program, ADFA MCC, AFDA Down Payment Assistance, Arkansas Dream Down Payment Initiative
California MyHome Assistance, CalHFA Zero Interest Program
Colorado CHFA Mortgage Programs, CHFA Down Payment Assistance Grant, CHFA Down Payment Second Mortgage Loan
Connecticut HFA Advantage and HFA Preferred Loans, Military Mortgage Option, Teachers Mortgage Assistance, Police Homeownership Program, Home of Your Own Program, Homeownership for Public Housing Residents, Down Payment Assistance Loan
Delaware: Preferred Plus Loan, First-Time Home Buyer Tax Credit
District of Columbia D.C. Open Doors, Home Purchase Assistance Program, Mortgage Credit Certificate
Florida Florida HFA Preferred Conventional Loan, Florida HFA Preferred 3% Plus Conventional Loan, Military Heroes Government Loan Program, HFA Preferred Grant, Florida Assist Second Mortgage, Florida Mortgage Credit Certificate Program
Georgia Georgia Standard Down Payment Assistance, Georgia PEN, Georgia Choice
Hawaii Affordable Resale Program, Mortgage Credit Certificate
Idaho Fannie Mae HFA Preferred, Fannie Mae HFA Preferred Risk-Sharing, Freddie Mac Home Possible Advantage, Forgivable Grant for Down Payment/Closing Costs, Second Mortgage for Down Payment/Closing Costs, Mortgage Credit Certificate
Illinois IHDAccess Forgivable, IHDAccess Deferred, IHDAccess Repayable, 1st Home Illinois
Indiana Affordable Home, My Home, Helping to Own (H2O), Next Home, Mortgage Credit Certificates
Iowa FirstHome Program, Homes for Iowans, FirstHome Plus Program, Homes for Iowans Plus, HFA Preferred Risk Sharing Program, Military Homeownership Assistance, Mortgage Credit Certificate
Kansas First Time Homebuyer Program
Kentucky Conventional Preferred Risk Program, Conventional Preferred Program, Home Buyer Tax Credit, Hardest Hit Fund Down Payment Assistance Program, Regular Down Payment Assistance Program, Affordable Down Payment Assistance Program
Louisiana LCC Choice Conventional Program, LHC Market Rate GNMA Program, LHC Mortgage Revenue Bond Assisted Program, LHC Home/MRB Program, PHC Delta 100 Program, LHC Mortgage Credit Certificate
Maine First Home Loan, Salute ME, Salute Home Again, Advantage, Mobile Home Self-Insured Option, Pre-1976 Mobile Home Replacement Initiative
Maryland Maryland Mortgage Premier, Maryland Homefront Mortgage, You’ve Earned It Mortgage, Maryland SmartBuy Mortgage, Preferred Rate Mortgage, 4% Grant Assistance, 6% Opportunity Grant, Partner Match, HomeCredit
Massachusetts MassHousing Mortgage, Purchase and Renovation Loan, Operation Welcome Home, Workforce Advantage, Down Payment Assistance
Michigan MI Home Loan, MI Home Loan Flex, MSHDA Down Payment Assistance, Mortgage Credit Certificate
Minnesota Start Up Mortgage, Step Up Mortgage, Monthly Payment Loan, Deferred Payment Loan
Mississippi Smart Solution, Mortgage Revenue Bond 7, Housing Assistance for Teachers, Mortgage Credit Certificate
Missouri First Place Loan Program, First Place Loan Program with Cash Assistance, Next Step, Next Step Cash Assistance Loan, Mortgage Credit Certificate
Montana Mortgage Credit Certificate RE-Issuance, Mortgage Credit Certificate, Montana Veterans' Home Loan Program, 80% Combined Program, Down Payment Assistance, Regular Bond Program
Nebraska Military Home Program, Homebuyer Assistance Program, First Home Program, First Home Targeted Program, Potential Recapture Tax, Recapture Tax Reimbursement
Nevada Home is Possible, Mortgage Credit Certificate, HIP Plus, HIP 1500, Home is Possible for Heroes, Home is Possible for Teachers
New Hampshire Home Flex Plus, Home Preferred Plus, Purchase Rehab, Home Start Homebuyer Tax Credit, Home Preferred Manufactured ROCs
New Jersey Down Payment Assistance Program, Police and Firemen’s Retirement System Mortgage Program
New Mexico FirstHome, NextHome, FirstDown, HomeNow
New York Achieving the Dream, Conventional Plus Program, Low Interest Rate Program, Down Payment Assistance Loans, Homes for Veterans Program, RemodelNY, Energy Star Labeled Homes Program, FHA Plus Program, Graduate to Homeownership Program, Neighborhood Revitalization Program
North Carolina NC Home Advantage Mortgage, NC 1st Home Advantage Down Payment, Community Partners Loan Pool, Self-Help Loan Pool, Mortgage Credit Certificates
North Dakota FirstHome, HomeAccess, North Dakota Roots, Major Home Improvement, Targeted Area Loans
Ohio Ohio Mortgage Tax Credit, Ohio Your Choice! Down Payment Assistance, Ohio Heroes, Ohio Grants for Grads
Oklahoma OHFA 4Teachers, OHFA Shield, Dream Grant, Gold Grant
Oregon Oregon Rate Advantage Home Loan, Oregon Cash Advantage Home Loan, Oregon Down Payment Assistance
Pennsylvania HFA Preferred Risk Sharing, HFA Preferred, Keystone Government Loan Program, Keystone Home Loan Program, Keystone Advantage Assistance Loan Program, Mortgage Credit Certificate, Programs for Persons with Disabilities, Homestead Down Payment and Closing Cost Assistance, Employer-assisted Housing
Rhode Island Closing Cost and Down Payment Assistance, FirstHomes Tax Credit
South Carolina SC Housing Home Loans, Repayable Down Payment Assistance, Forgivable Down Payment Assistance, SC Mortgage Tax Credit Program
South Dakota First-Time Homebuyer Program
Tennessee Great Choice Loan, Homeownership for the Brave, Great Choice Plus, Hardest Hit Fund
Texas My First Texas Home Loan, Texas MCC
Utah First Home Loan, Home Again Loan, Score Loan, NoMI Loan, Grants for Veterans
Vermont ASSIST Downpayment and Closing Cost Assistance, Advantage, Mortgage Credit Certificate, Move MCC, Move
Virginia Down Payment Assistance Grant, Granting Freedom, Mortgage Credit, Fannie Mae Preferred with Reduced Mortgage Insurance, Fannie Mae 97% No Mortgage Insurance, FHA Plus, USDA (Rural Housing Service)
Washington Home Advantage DPA #1, Home Advantage DPA #2, Opportunity DPA, Home Choice, House Key Veterans
West Virginia Down Payment/Closing Cost Assistance Program, USDA 502 Direct Loan, HOME Leverage Loan program
Wisconsin First Time Home Buyer Advantage, WHEDA Advantage, Veterans Affordable Loan Opportunity Rate, WHEDA Tax Advantage, Capital Access Advantage, Easy Close Advantage
Wyoming First-Time Homebuyer, Homestretch Down Payment Assistance Loan, Spruce Up, Amortizing DPA Loan Product, Advantage, HFA Preferred, Mortgage Credit Certificate,
Why should you use state programs?
You should use a state program for buying your home since you can get far more favorable terms and conditions than through private programs. Some states also provide grants and other discounts if you know where to look.
For example, HUD.gov has a full list of all home buying programs in each state, as well as a list of resources for individuals for homebuyer grants, while USA.gov has a list of programs to help you pay for a home.
National first-time homebuyer programs
While there are plenty of state programs, chances are you can also qualify for a national first-time homebuyer program. Here are some to consider:
FHA loans are usually the go-to option for Americans looking to buy their first house or for those who could use some help to make up for not-so-great credit history. FHA loans do come with built-in mortgage insurance costs, but this protects the lender in case you default. Otherwise, you can qualify for this loan if you have as little as 3.5% to put down.
VA loans are available to anyone who is a service member, veteran, or surviving spouse of one. These are especially generous loans that sometimes don’t even require a down payment or mortgage insurance. There are just a few requirements for this loan – amount of debt, sufficient income, etc. Lenders can add their additional requirements on top of this.
The USDA is also a part of the national home buying program action, offering assistance to those looking to buy in rural areas. These loans allow for 100% financing because they offer lenders full mortgage guarantees. Homebuyers should be aware that there are income limitations to this loan that will vary depending on the region you’re looking for.
Fannie and Freddie
Even though these may sound like two old-school first names, they’re two government-sanctioned loan companies that work with local lenders to provide special options on conventional home loans. Some of the more attractive options include a 3% down payment.
Home Renovation Loan
Want to get more property for your hard-earned money? Of course you do. Home renovation loans like the Energy Efficient Mortgage Program, FHA 203(k) loans, CHOICE Renovation loans, and Homestyle Loans all offer something a little bit different to help you purchase and take on a fixer-upper so that you can create your own ‘dream home.’
Good Neighbor Next Door
Originally started just for teachers, this type of national assistance program now includes teachers, law enforcement, EMTs, and firefighters. This program is sponsored by the Federal HUD, allowing for half-off the listing price of homes located in certain revitalization areas. Some stipulations come along with this program, though, like a commitment to living there for at least three years. You have to be quick to find a house that qualifies for this loan, as they’re only listed for seven days each on the Good Neighbor Next Door website.
“Dollar homes, is that even real?” Why yes, yes it is. HUD offers a tiny pool of houses that have been acquired by the Federal Housing Administration through foreclosure for just $1 to willing buyers. You’re likely to only see a small handful of properties listed on the site at any given time – and the houses are never in great condition – so just shop wisely.
HomePath ReadyBuyer Program
This program offers 3% closing cost assistance for those buying their first property. The only requirements are the completion of a home-buying education course and the purchase of a Fannie Mae foreclosed home.
Energy-Efficient Mortgage Program
These loans, backed by VA or FHA, allow buyers to combine their energy-efficient home upgrades with their primary loan.
Native American Direct Loan
Eligible Native American veterans have access to direct home loans to buy, build, or renovate houses on federal trust land.
How do I get a first-time homebuyer grant?
Of course, to reap the benefits of any loan you’ll first need to qualify for it. Eligibility for each loan may have its requirements, so be sure to take a closer look at the loans you’d like to apply for to be sure you qualify for it.
To qualify for any loan, you must first be approved for a mortgage loan. If you’re not sure whether or not you qualify, it’s a good idea to visit a lender for pre-qualification or pre-approval just to be sure before moving forward with grant or loan applications.
Eligibility requirements will vary, but some of the most common requirements include:
- Sufficient income.
- Must live in the house for a certain period.
- The house must qualify for the loan.
- Credit history must be good.
Can you be a first-time home buyer in another state?
You can certainly buy a house from out of state or move states to take advantage of the first-time homebuyer benefits, but the challenge of finding a property and getting approved for the loan from far away carries its risks and challenges.
Getting your pre-approval from another state can be difficult, and it might require more from you. For example, you might need more money upfront for the down payment or have a pretty stellar credit score. By giving yourself enough time to work through the presented challenges, you can still purchase your first house from out of state.
What is the maximum income to qualify for first-time homebuyers?
There are often income limits that apply when you choose to apply for government assistance to buy your house.
For example, to qualify for the national USDA loan, the total income earned by your household cannot exceed 115% of what the local median income is where you’re buying. The USDA limit for a household of one to four people is capped at $86,850 while the limit for five to eight-member households is capped at $114,650. These are just two examples to give you a rough idea of what income requirements might look like.
If you’re itching to own a property to call your own rather than renting with nothing to show for it, you might be able to take advantage of the above resources for a boost. The above loans, grants, and lending programs can help lower your down payment or interest rate – they might even help you find the bargain you’ve been looking for!
Be sure to do your research into first-time home buyer state programs and don’t miss out on all the benefits.