First-Time Home Buyers

A person’s first home purchase is a big deal. To help with the up front down payment, some people use first time home buyer loans. These programs vary depending on where they’re offered, but the general idea is this: first time home buyer loans give financial assistance to qualified borrowers. They may do this in the following ways:

Allow for a very low (or no) down payment.
Subsidize interest costs (they pay all or part of it)

• Offer grants
• Forgive loans
• Limit fees that lenders are allowed to charge
• Provide Secondary Financing

First time home buyer loans available to you might offer any or none of the benefits listed above. We can help you research first time home buyer loans available in your area. A good place to start is the HUD Web site on home buying programs. Individuals who have never owned a home are good candidates. In addition, some programs offer first time home buyer loans to people who have not found a home within the last three years. You may have to meet certain income restrictions to qualify for a subsidized first time home buyer loan. In general, these programs try to limit benefits to people with low and moderate income levels. If you earn too much, you won’t qualify for the program. Most programs put a dollar limit on the property you’re buying. You probably can’t use a first time home buyer loan to buy the more expensive properties in your area. Instead, you’ll be limited to properties on the lower end of the spectrum. Again, the idea is to benefit people who have the most need. You also have to live in the home as your primary residence. If you’re going to rent the place out, don’t use the first time home buyer loan. Finally, the home you buy most likely has to meet some physical requirements. It must be in good condition and free from any safety hazards (such as lead-based paint, for example).