The Best Programs for First Time Homebuyers

Buying a home rates as one of the most important decisions made by an individual. It’s emotionally, mentally as well as financially monumental. Many people believe that buying a home is something far off in the future. However, a wide variety of programs exist to help first-time homebuyers purchase a home sooner than expected. The following programs, offered by the government, help first-time homebuyers reach their goal.

FHA Loan

FHA is the abbreviation of the Federal Housing Administration loan provided by the government. This option is the best fit for individuals with lower credit scores. It also helps those who are unable to pay larger down payments. While the normal down payment for a home is 20%, FHA loans can require as little as 3.5% down.

The eligibility criteria for an FHA loan is a credit score of at least 580, and 3.5% of the total amount paid as a down payment. For those with lower credit scores, there is an option to get a loan with a minimum credit score of 500, but with a higher down payment of 10%. With these loans, it is also worth keeping in mind that when you pay less than 20% down, you’ll more than likely need to also pay for private mortgage insurance to protect the lender from the risk of you not making your payments.

VA Loan

The Veteran Affairs loan program is for individuals who have continuously served at least 90 days active duty or have been in reserves for six years. This program also extends to certain beneficiaries including surviving spouses. The best part about this program is that it requires no down payment, no PMI, and no minimum credit score. A minimal interest rate also accompanies it.


A USDA loan is one of the most appreciated programs for first-time homebuyers. The US Department of Agriculture provides this program for those looking to buy a home in rural areas of the country. In some states, suburban areas are also included. Individuals with income on the lower spectrum and a minimum credit score of 640 are eligible for this program. This score can be waived off a bit with some additional documentation. It allows complete financing as well as assuring lenders with mortgage guarantees.

Fannie Mae and Freddie Mac

Fannie and Freddie housing loan programs come under the banner of conventional loans. The thing that differentiates it from other options is that it is suited for buyers who have constraints on down payments but have good credit and a stable job. The down payment can be as low as 3% under this program. The eligibility criteria is to have a credit score of at least 620, with a clear credit history. You’ll still have to pay private mortgage insurance, but if you’re planning on staying in your home for a long time, you’ll be able to cancel the insurance once you reach 20% equity.

Good Neighbor Next Door Program

This program was designed by the US Department of Housing and Urban Development (HUD) for the individuals working in public welfare sectors. This includes firefighters, public servants, teachers, police officers, and medical technicians.

Under this program, you can secure a discount up to half the total price in designated “revitalization areas” with a low down payment and no application fees. The only constraint includes living in the home for at least 36 months.

These programs for first-time homebuyers help many people across the country. They  lessen the monetary burden while making a secure investment in homeownership. To learn more about which program is right for you, speak with a certified loan consultant at Galaxy Lending Group. They will help you find the right loan for your home needs.