Let’s face it: It’s not the most encouraging market for a first-time homebuyer in the US right now. Plus, there’s also the tricky task of finding the right mortgage, especially if you’re a literal first-time homebuyer unfamiliar with the process.
For some first-time buyers, government-backed loans may be easier to qualify for depending on your financial situation. “The credit score range is typically wider, allowing for lower credit scores and higher debt to income ratios, resulting in more clients qualifying to purchase,” explains Debbie Dierenfeld, a realtor with Realty One Group Impact.
“Many of my first-time homebuyers have student loans and are possibly starting a family. This is the perfect match for them and gives them more buying power they may not otherwise have.”
But federal loan programs aren’t the best for everyone. Think of it this way: When shoe shopping, you really want to find the shoe that fits your foot. In mortgage hunting, you want the mortgage that fits your financial profile.
If you think that a federally backed loan might be the glass slipper to your Cinderella, here are three programs that may be well suited for a first-time home buyer, plus what you need to qualify.
Note: For more tailored information on which loan is best for you personally, please see a certified mortgage broker.
1. FHA loans are a popular option for first-time buyers.
2. VA loans exist to help veterans finance their homes.
3. Finally, USDA loans can be a great option for those who want to buy in rural areas.
In addition to these national programs, there are also many state and local options you can look into as you're researching what's best for you.
To see what's available in your area, choose your state from this list on the HUD website.
Have you tried applying for any of these government-backed loans? Tell us about your experiences in the comments.
And for more stories about life and money, check out the rest of our personal finance posts.