Homebuyer Assistance Programs

Homebuyer Assistance Programs

There are a number of different programs available for first-time homebuyers. Many people begin the home buying process with one of these programs or with a program offered by local community organizations. Be sure to ask your financial institution or mortgage counselor about available options.

Federal Housing Administration (FHA) Insured Loans

The 203(b) is the most common FHA loan featuring:

• Low down payment
• Flexible qualifying guidelines
• Limited lender fees
• Maximum loan amounts

Department of Veterans Administration (VA) Insured Loans

Features include:

• No down payment requirements
• You must be an eligible veteran
• Competitive and negotiable fixed interest rates
• Limitations on closing costs
• Longer payment terms

Federal National Mortgage Association (FNMA) and Federal Home Loan Mortgage Corporation (Freddie Mac) Loans

FNMA and Freddie Mac both offer many loan programs. The programs may include features such as low or no down payment requirements and options for borrowers with less-than-perfect credit. In addition, some programs are targeted for various groups, such as:

• First-time buyers
• Low- to moderate-income buyers
• Teachers, firefighters, law enforcement officers, and health care workers

United States Department of Agriculture(USDA) Rural Development Housing Services

The USDA offers loan programs for those seeking to purchase homes in rural areas. Two loan programs are the Section 502 Rural Housing Direct Loan and the Section 502 Single Family Housing Loan Guarantees.

Section 502 Rural Housing Direct Loan

• You must have income between 50 and 80 percent of the median income for the area in which you live.
• You must be unable to obtain financing elsewhere.
• The loan can be financed at 100 percent.
• Payments are usually 22 to 26 percent of your income.

Section 502 Single Family Housing Loan Guarantees

• You may earn up to 115 percent of the median income for the area in which you live.
• You must be unable to obtain credit elsewhere.
• You must be without adequate housing.
• You must be able to afford the payments.
• Thirty-year term. 
• No down payment.