First-Time Homebuyers: Government Assistance

Buying your very first home is one of the biggest life milestones. Besides saving you from the hassle of moving every now and then, it gives you a permanent place to build your family. In addition to creating a major asset, it also gives you something to leave behind for loved ones.

Due to increasing interest rates and stringent demands, the very idea of purchasing a home may send a shiver down your spine. But as a first-time home buyer, you have plenty of options to reduce the financial burden on your shoulders.

To help you explore these benefits, here is an overview of some of the most popular government assistance programs for first-time homebuyers.

Discounts through the Federal Housing Finance Agency

For first-time home buyers, the Federal Housing Finance Agency (FHFA) offers a discount of up to 1.75 percent on mortgage rates. But in addition to buying your first home, you need to meet a few additional requirements in order to qualify for these benefits.

These stipulations include choosing a 30-year fixed-rate mortgage and earning an income that is either below or on par with the income of other households in your area. If you meet these conditions, it is possible to get a mortgage as a self-employed individual or salaried employee.

Benefits for Veterans and Families

If you are a veteran or an active servicemember, you can qualify for the Veteran Affairs mortgage program. This mortgage gives you the benefit of not paying a down payment in most cases, availing the loan at reduced interest rates, and not purchasing private mortgage insurance (PMI).

If you have a minimum credit score of 620, you can check for VA home loan rates in your area. Since this is a lifetime benefit, you can use it for future home purchases as well. The benefit is also available to the surviving spouses of veterans.


Program from the Federal Housing Administration


Similar to other government programs, FHA loans are offered by private lenders but backed by the government. Due to its ability to entertain applicants with credit scores as low as 500, the FHA loan stands out as an ideal answer when you are learning how to get a mortgage with a low credit score.


You may need to pay a higher down payment of up to 10 percent with low credit scores. However, if you have a credit score of 580 or higher, you can benefit from a minimum 3.5 percent down payment option. You can use a budget planner to put your finances together for this loan.


Assistance through the United States Department of Agriculture

A United States Department of Agriculture (USDA) mortgage with no down payment and low interest rates is available to people in non-urban areas. If you are looking for a home in a rural or suburban area, you might be able to benefit from this mortgage. This loan also does not require you to pay for PMI.


Similar to some online business loan requirements, you need to meet income thresholds to qualify for the USDA loan. A credit score of 640 or higher can help you with faster processing, but you can apply with a lower credit score as well.


Grants from State-Based programs

If buying a home has been on your list of life goals app for a while, you can also explore state-based programs for first-time home buyers. For instance, if you live in New York, you may benefit from the HomeFirst Down Payment Assistance Program to get up to $100,000 for your down payment.


Exploring these programs may require you to invest some time in the process. But similar to using a price comparison platform for regular shopping, the effort is worth it. When you find available programs that you can avail of for your home-buying needs, you can cut down on significant costs during the mortgage process.


By going through this information, you can make an informed decision about availing yourself of some of the most popular government-backed home loan programs. This makes it easier for you to afford the house of your dreams.


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