Important takeouts:
Benefits for first-time home buyers include down payments and closure fee support, grants, tax benefits, low interest rates or allowable loans. Eligibility depends on factors such as income, location, home price, and use of approved lenders. Federally, state, local, non-commercial, and lender-backed programs can unlock these savings.
Buying your first home is a big investment and there are many surprises. If you feel this next chapter of life is out of reach, you can use it. There are first-time home buyer perks, including down payment assistance and tax credits, designed to make homeownership more affordable.
Whether you’re buying your first home in Lansing, Michigan or Tucson, Arizona, this guide will help you discover the benefits and eligibility methods you can receive as a first-time home buyer. Let’s get started.
Are you considered your first home buyer?
If you have purchased your first home or have not owned a major home in the past three years, you will be considered your first home buyer.
Below are some examples that could be considered a first-time buyer.
You have never owned a home before. You used to own a house, but for the past three years, you haven’t. In the past, he shared ownership with his spouse, but is currently buying a solo. You have rented, lived with your family, or have not held a mortgage for three years. Purchased in designated redevelopment areas. Some programs relax the rules (even if they are repeat buyers).
Note: Do not rule out yourself immediately as definitions may vary slightly from program to program. If you are unsure, talk to a mortgage lender, housing counselor, or real estate agent.
Who will provide support to first-time home buyers?
Your first-time home buying program is available from a variety of local and national sources. This is the main place of the look:
State and Local Housing Authorities: Many states and cities offer down payment assistance, grants, or low-interest loan programs through housing finance institutions. Federal Programs: Many types of mortgages, including FHA, VA and USDA loans, can make your home more affordable due to lower payments or flexible credit requirements. Nonprofits: Groups like NeighborWorks provide home buyers with education and financial support. Banks and Mortgage Lenders: Many offer first-time buyer incentives, including rate cuts, special loan terms, or access to grant programs. Credit Union: Member-centric lenders may offer more flexible terms and exclusive programs to qualified buyers.
Benefits and Programs for First-Time Home Buyers
Buying a home for the first time comes with many challenges, but there are also some benefits and programs designed to make the process more affordable. Some of the most common benefits available are:
Support for down payments and closing costs
One of the most common dilemmas for new buyers is paying enough cash upfront. Many programs offer low or interest-free loans to cover fall or closing costs. In some cases, these loans will be postponed until you sell your home (or even allow it after a certain number of years).
Grants
Unlike loans, grants do not have to be repaid. These are usually provided by state or local governments and nonprofits and help to cover some of the down payment or closure costs. To qualify, you usually need to meet certain income restrictions or agree to live in the home for a certain period of time.
Government-supported loans
Federal lending programs such as FHA, VA, and USDA loans make it easier to qualify for a mortgage with a lower down payment or lower than perfect credit. This is especially useful for buyers who do not meet traditional loan requirements. Let’s break it down:
FHA loans have a credit score of over 580 and require a mere 3.5% down. VA loans provide 0% down to eligible veterans, active service members, and surviving spouses. USDA loans provide 100% funding for rural or suburban homes.
Tax benefits
Some programs offer Mortgage Credit Certificates (MCCS). This allows you to claim a portion of your mortgage interest as credit on your federal tax return.
Home buyer education
Many support programs require or recommend completing a homebuyer education course. These workshops cover budgeting, understanding mortgages and maintaining your home.
How to find available assistance programs in your area
Visit the state or local Housing Finance Agency (HFA) website. For links to state-specific programs, please check the National Council (NCSHA) website. Talk to an approved mortgage lender or a local real estate agent.
How to qualify for first-time home buyer support
Eligibility for first-time home buyers to assist depends on the program and your location. Each program has its own rules, but these are some general requirements that you are likely to see.
Income and home price limits: Many programs are designed for low to medium income buyers, so revenue (and the price of the home you are purchasing) may need to fall within a certain range. Check your state housing finance institutions through the National Council Housing Agency website. First time buyer status: Most programs require you to not own a major residence in the past three years. However, several options are available to help repeat buyers under special conditions (i.e., purchases in redevelopment areas). Eligible Occupations: Specific programs are designed for those who support the occupation (i.e. teachers, nurses, firefighters). These often have additional savings or home discounts. Completion of Home Buyer Education Course: A homebuyer class is generally required to qualify for grants, loans, or down payment assistance. Even if it’s an option, it’s a wise move. Use of an approved lender: If you are applying for a state or local housing program, you will generally need to look into the lenders that are authorized to handle that program.
Why first-time home buyers need help
Without the benefits of home equity and years of savings, entering the market can feel out of reach. Here’s why supporting first-time home buyers is important and why it benefits everyone.
Home prices are steep. With today’s housing costs and interest rates, savings for a down payment is not easy, especially if you’re starting out. Many buyers have limited savings. First-time buyers often have not yet built stocks or long-term savings. Homeownership builds wealth. Buying a home will help you build equity and invest in your future. Supports the housing market. Starter homes create room for others to move up and make the housing market healthy and active. Strengthen the community. Homeownership encourages long-term neighbourhood engagement and stability.
The bottom line on profits for first-time home buyers
Buying your first home is a big step, and yes, it can feel overwhelming. But the good news is that you don’t have to do it alone. Here you can help our first-time home buyer program, offering everything from down payment assistance and low interest loans to educational tools.
If you’re wondering how to buy your first home, the best place to start is to explore what your first home buyer program is available in your state. A reliable lender or real estate agent will help you explain your options and understand what suits your budget and lifestyle.
FAQ
Is there an income level to qualify?
Yes, many first-time home buyer programs have income limits. These will vary depending on where you live and the size of your home. Typically, these restrictions are designed to support low-income buyers and moderate buyers, so you may be eligible to earn a stable income.
To find your current income limit, check the state Housing Financial Institutions (HFA) websites that can be found on the state National Council website.
If I have a student loan, can I qualify for my first home buyer loan?
Having a student loan will not automatically disqualify you. Lenders will consider the debt-to-income ratio to see if they can comfortably manage their mortgage along with other monthly payments.
Is there a federal or state tax credit for first-time buyers?
Currently, there are no federal tax credits, but some states and local governments offer tax benefits. It’s definitely worth checking out with your state housing agent to see what’s available near you.
What is your first $15,000 home buyer tax credit?
This proposed first-time home buyer tax credit will be given to eligible buyers at 10% of the home’s purchase price (up to $15,000) as a refundable credit to help cover the down payment. Although widely debated, this particular federal tax credit has not been enacted.
How much does a down payment do you need for a house?
It depends on your financial position, goals and loan type. Though 20% of lenders are preferred, many first-time home buyers programs now allow far lower down payments.
>>Read: Down payment at home: How much do you really need?
