There are many programs available for first-time home buyers. These programs can be sponsored by government programs, as well as private banks and individual lenders. Most programs are specific to income, location, and sometimes even occupation.
Down Payment Assistance
Several government agencies provide down payment assistance programs for first time homebuyers with low to moderate incomes. These programs help buyers who wouldn’t usually have money for a typical down payment. Offered by private lenders, there tends to be more competition for these funds. Make sure to make contact with a loan officer to identify potential programs that may be available to you.
The Federal Housing Administration provides various mortgage loan programs, which typically require smaller down payments (as low as 3 percent), making it easier for first time home buyers to afford a home. Many of these loans require mortgage insurance that will be an added cost above your mortgage and tax payments – meaning: higher loan payments and less equity in the home initially. FHA loans aren’t for everybody, and you should speak to a loan officer about your options before proceeding.
These loans are guaranteed by the United States Department of Veterans Affairs. While these loans are not issued by the Veteran’s Affairs office, they are guaranteed. With these guarantees in hand, veterans and service people can obtain home loans with better terms and sometimes with no money down. Additionally, many lenders limit VA loans to a maximum loan amount, varying by state.