What first-time homebuyer programs are available?

"First-time homebuyer" programs reduce the cash and credit barriers to homeownership through lower down payments, below-market rates, or direct down-payment assistance. The term is broader than it sounds — many programs define "first-time buyer" as someone who hasn't owned a primary residence in the past three years, so previous homeowners who've rented for a few years may qualify.

Federal loan programs with low barriers

• FHA loans — 3.5% down with a 580+ credit score; 10% down with 500–579. Insured by HUD/FHA. Most accessible credit requirement among mainstream programs.
• VA loans — 0% down for eligible veterans and active-duty service members. No PMI. Guaranteed by VA.gov. Best overall terms for those who qualify.
• USDA loans — 0% down for properties in eligible rural and suburban areas with income limits. Backed by USDA Rural Development.

Fannie Mae and Freddie Mac first-time buyer programs

Fannie Mae's HomeReady and Freddie Mac's Home Possible programs allow conventional loans with 3% down and accept income from household members beyond the primary borrower. Both require completion of a homebuyer education course. Eligibility is based on area median income limits — income cannot exceed 80% of AMI in most cases. These programs carry PMI below 20% down but at reduced rates compared to standard conventional PMI.

State and local down payment assistance

Every state has a housing finance agency (HFA) that offers down payment assistance (DPA) programs — typically grants or forgivable second mortgages covering 3%–5% of the purchase price. Eligibility rules (income limits, purchase price caps, property location) vary by state and program. The HUD directory of HFAs links to every state's programs. Local municipalities and nonprofits also administer DPA — check with your state HFA and local housing authority.

HUD-approved housing counseling

HUD-approved housing counselors provide free or low-cost guidance on budgeting, credit improvement, mortgage options, and navigating the homebuying process. Many DPA programs require completion of a counseling course. Finding a counselor before you start shopping can save significant time and money.