The Top First Time Buyer Programs

One of the most common questions I get as a mortgage broker is what programs do you offer for first time homebuyers? It’s a great question because as a FTHB, you’re new to all this information, you’re new to the process, and so it’s very important that you ask for as much information as possible and are given that information.

Let's start by going over what it means to be a FTHB. A FTHB is someone who hasn't owned real estate in the past 3 years! So if you bought a home 10 years ago, sold it a year later and wanted to buy a home today you, would still be classified a first time homebuyer! 

Now, when it comes to FTHB programs, it’s actually not as complicated as people think. There’s really only two programs that most FTHB use to buy their first homes. This doesn't mean that there aren't more programs or options out there. For example, you may have heard of the down payment assistance options. These aren't necessarily program in themselves but are simply additions or what I like to call options for FHA or Conv loans. In other words if you get a down payment assistance program or option on your loan you either have a FHA or Conv. loan. Those are really the only two programs that offer them. The last thing I wish to cover here on down payment assistance options are rarely used by the FTHB because they can come with higher interest rates. The rates may be at 5% and with this down payment assistance option you may get a 7% or 8%. In order to keep this article short and sweet, we won't go any further on the subject of payment assistance but I will dedicate an entire article on it in the future! 

So now that we have narrowed it down to FHA and Conv. Let us go over their requirements, features and benefits. 

FHA:

-3.5% Down

-580 Min. FICO 

-Mtg Insurance until you refinance 

Ideal for buying multi-units, FTHBs, or FICOs in the 600s 

Conv:

-3% Down for FTHB

-620 Min. FICO 

-Mtg Insurance until you reach 20% equity 

Ideal for higher FICOs 720+, Condos, FTHBs