Best Home Loans For First Time Buyers

First time home buyer loan assistance and programs available in every state.

With the mortgage crisis of recent years, lending standards have tightened dramatically. First time home buyer loans are more difficult to obtain than they were just a few short years ago.

Fortunately, there is help available for first time home buyers seeking their first ever mortgage.

Many states offer outright cash grants for the down payment and closing costs to help people get a first time home buyer mortgage, provided they meet certain income qualifications. We’ve organized all this state grant information in an easy to use format. Check out First Time Home Buyer Grants for all the details.

best lender for first time home buyer loans

Unfortunately, some lenders do not like to work with first time home buyers (due to not having a track record), and prefer instead to only provide mortgages to people who have previously owned a home. If you do not need help with the down payment and are not in need of any state program, but simply want to apply for a mortgage, you are in much better financial shape than most first time buyers.

If you are not yet ready to apply and are in need of some assistance, many states have additional help in the form of low or reduced interest first time home buyer loans as well as outright cash grants. These loans and grants make it possible for first time home buyers to afford a mortgage when they would not be able to do so the conventional way. In most cases, the savings in interest costs is in the tens of thousands of dollars. Listed below is a complete state by state list for more information.

California: The state of California offers one first time home buyer loan program through the California Housing Finance Agency. For information on the program details, please go to California First Time Home Buyer Loans

What is a First Time Home Buyer Loan?

A person’s first home purchase is a big deal. It takes time, energy, and money. To help with the money hurdle, 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
  • Defer payments

Note that first time home buyer loans available to you might offer any or none of the benefits listed above. You should research first time home buyer loans available in your area. A good place to start is the HUD Web site on home buying programs.

Who Gets First Time Home Buyer Loans?

As you might imagine, 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. Again, check to see what’s available to you.

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.

First Time Home Buyer Loan Restrictions

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).

home loan services in los angeles ca