10 first-time homebuyer loans and programs
First-time homebuyer programs, grants and loans are available to help people become homeowners. These programs are a form of financial assistance extended to qualified buyers, usually those who meet certain income restrictions and have strong credit scores.
Here are a few different ways you could benefit from these programs:
- Grants: Some areas offer cash to put towards home-related costs such as your down payment or closing costs.
- Assistance with closing fees: Some loans place a cap on how much is charged for closing costs.
- Deferred payments: Some loans won’t charge interest and won’t need to be repaid until the homeowner sells the home or pays off the mortgage.
- Savings on interest: Some organizations offer to pay for or subsidize interest, or help borrowers qualify for loans with lower interest rates.
- Loan forgiveness: Homeowners who stay in the home for a certain period of time will have a portion of their debt cancelled.
- Down payment assistance: Some programs allow home buyers to put down a small down payment, or none at all.
Here are 10 first-time homebuyer programs in 2020
- FHA loan program: A loan insured by the Federal Housing Administration. Good for those with low credit scores and little money saved for a down payment.
- USDA loan program: A loan program 100 percent guaranteed by the U.S. Department of Agriculture for lower-income borrowers in eligible rural areas.
- VA loan program: A loan backed by the U.S. Department of Veterans Affairs that allows no down payment for military personnel, veterans and their families.
- Good Neighbor Next Door buyer aid program: A U.S. Department of Housing and Urban Development (HUD) program that provides housing aid for law enforcement officers, firefighters, emergency medical technicians and teachers.
- Fannie Mae or Freddie Mac loan program: Conventional loans backed by Fannie Mae or Freddie Mac require only 3 percent down. Good for those with strong credit.
- HomePath ReadyBuyer Program: A program that provides 3 percent in closing cost assistance to first-time buyers. Must complete an educational course and buy a foreclosed Fannie Mae property.
- Energy-efficient mortgage program: Backed by FHA or VA loan programs and allows borrowers to combine the cost of energy-efficient upgrades onto a primary loan upfront.
- FHA Section 203(k) loan program: Borrow the funds needed to pay for home improvement projects and roll the costs into one FHA loan with your primary mortgage.
- Local first-time homebuyer programs and grants: Many states and cities offer first-time buyer programs and grants for down payment or closing cost assistance.
- Native American Direct Loan: This VA-backed program provides direct home loans to eligible Native American veterans to buy, renovate or build homes on federal trust land.