Keller Williams Main Line
Janis Peterson
Janis Peterson, Realtor®, GRI, ABR, SRES, CSP


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Beginner's Guide to First-Time Home Buyer Programs

Today, first time home buyers are facing one of the toughest real estate markets. Inventory is especially tight in many parts of the country as investors purchase these houses to flip for quick income. Moreover, increasing costs are compelling constructors to concentrate more on high-end houses that increase their own profit margins.

For a first time home buyer, free money is a dream. But we know how not all dreams come true. Fortunately, there are numerous first time home buyer programs and grants available to help you manage paying for your first real estate purchase. These first time home buyer assistance programs offer benefits such as lower down payments and closing costs. We’ve compiled eight of the best first time home buyer government programs and other grants to help you buy your first home.

1. Federal Housing Administration (FHA) Loan

The FHA works with local creditors countrywide to offer loans to individuals who may not qualify to get them elsewhere. As the government indemnifies shares of these mortgages, creditors are at ease offering first time homeowners loans to individuals without the strongest credit history. For instance, a credit score of around 580 can earn you an FHA loan with a 3.5% down payment, making it a solid first time buyer program.

2. United States Department of Agriculture (USDA) Loan

Among the options of special first time home buyer grants, the USDA provides low interest loans to low income individuals who wish to live in rural regions. But, the USDA has a broad definition of “rural” so even some outlying locations fall under its radar. These loans usually carry low-to-no first time home buyer down payment. The USDA indemnifies local creditors to a certain extent, so the government organization takes on less risk providing loans with modest rates.

3. Veterans Affairs (VA) Loan

The Department of Veterans Affairs offers loans to eligible military members including first time home buyers. Unlike their conventional counterparts, these first time home owner grants usually carry lower interest rates. VA-partnered creditors also offer mortgages with little-to-no down payment. To be eligible, you must fulfil certain requirements specified by the VA and possibly some specified by particular creditors.

4. Native American Direct Loans (NADL)

NADL is another popular first time home buyer loan, which is backed by the Department of Veterans Affairs for homes on Federal Trust Land. To be eligible, you must fulfill the elementary requirements for a traditional VA grant along with other terms. For instance, you must be a Native American enrolled in an American Indian tribe or Alaskan Native village or belong to a tribe that has set a Memorandum of Understanding (MOU) with the VA. Alternatively, you should be married to an eligible individual.

5. Good Neighbor Next Door Program

It’s a first time buyer program sponsored by the U.S. Department of Housing and Urban Development (HUD). It provides housing assistance for law enforcement officers, firefighters, emergency medical technicians, teachers, and other public servants. This program helps these individuals stay in their local communities by helping them repay their home costs.

6. Fannie Mae or Freddie Mac Program

Both these first time home buyer programs are best for mortgagors with strong credit but minimal down payments. They are government-sponsored enterprises that set borrowing guidelines for mortgages they’re willing to purchase from conventional creditors on the secondary loan market. Both programs necessitate a minimum 3% down payment. You also need a minimum credit score of 620 (depending on the creditor) and a comparatively flawless financial and credit history to be eligible.

7. Energy-Efficient Mortgage (EEM)

These loans are ideal for first time home buyers who want to make their house more energy-efficient but don’t have upfront money for renovations. EEM loans are insured through the FHA or VA programs, helping you meet the costs of making “green” upgrades to your home. These upgrades include new insulation, a more efficient HVAC system or double-pane windows.

8. State and Local First time Home Buyer Programs

Regardless of what state you live in, you should check out your local government housing agency to see if it has any first time home buyer grants for which you might qualify. For example, the Pennsylvania Housing Finance Agency (PHFA) offers down payment and closing cost assistance to first time home owners in the Keystone State. It also provides mortgage loan programs, refinancing, and home improvement loans. Some state housing programs also partner with loan creditors to offer 30-year fixed rate loans with competitive rates for eligible candidates. Often, you can even combine these loans with other aids and endowments.

With so many first time home buyer programs to choose from, it can get overwhelming for you to narrow down your options. That’s where Main Line Homes can help you. From Ardmore to Haverford and beyond, as your buying agent, we can help streamline the process of buying a home for the first time. Contact us today to find out more about our services.

Janis Peterson, REALTOR®, GRI, ABR, SRES, CSP
Main Line Homes Luxury Real Estate Agent

Keller Williams Main Line
Suburban Square
6 Coulter Ave 
Ardmore, PA 19003 
Direct: 610-642-3744

Whether you're selling your current home or are looking for your dream home, call us at (610) 642-3744 or e-mail for a free consultation.


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