Life Hacks

8 First-Time Home Buyer Resources

July 27, 2021

Last year, first-time home buyers made up 33% of all homebuyers in the United States. As more and more millennials begin to enter an age where they’re financially stable enough to invest in a home, they’re also beginning to look for more resources that will help them make the home buying process easier and cheaper.

If you’re interested in buying a home but have questions about home loans, the home buying process, and what to expect from start to finish, it can be hard to find the answers you need, let alone in one place for you to easily access.

So, we’ve curated a list of the top resources, including all of the best places to search for first-time home buying assistance and the best first-time homebuyer programs, which are available in every state across the country.

Resources for First-Time Home Buyers

1. FHA Home Loans

As a first-time homebuyer, there are actually quite a few federal programs and grants available to help make the process more affordable. Through the Department of Housing and Urban Development, you can qualify for two different programs. The most popular is perhaps the loan program through the Federal Housing Administration or FHA. Requirements aren’t that strict to receive a loan through the FHA, making it an ideal option for first-time buyers. The loans require a credit score of about 650 or higher and a 3.5% down payment.

2. USDA Home Loan Program

Yes, even the US Department of Agriculture gives out home loans at great rates to help incentivize first-time homebuyers to move to rural areas. The best part? They require absolutely no down payment and often come with low interest rates compared to traditional first-time buyer home loans. And, we’re talking super-low interest rates, as lows as 1% in some cases. You will have to show an acceptable credit history; those with a credit score of about 640 tend to receive better rates and enjoy a more streamlined loan process.

3. HUD Homes

Homeowners who have taken advantage of the FHA home loans mentioned above sometimes default on their loans. When that happens, the HUD takes possession of the home, which benefits you! These homes are a great option for those who are new to the home buying process as they are a bit more lenient with the requirements needed to qualify for the loan. They’ll check your credit score, down payment amount, and a few other things, but it’s an easier option than going the traditional route.

4. HomePath Ready Buyer Program

First-time home buyer programs are sometimes disguised as courses that allow you to receive a grant when you complete them. The idea behind this tactic is to truly train first-time homebuyers to be financially smart with their home investment. The HomePath Ready Buyer Program is one such course. It costs $75, but upon completion, you’ll receive a grant for 3% of the closing costs as long as you purchase a Fannie Mae property (all of which have previously been foreclosed on).

5. State First-Time Home Buyer Programs

On top of federally-backed loans, every state has its own home-buying assistance program. While these programs vary in scope from state to state, they nearly all feature assistance in the form of down payment loans, mortgage assistance, closing cost assistance, and homeowner programs in rural communities. If you don’t qualify for a federally-backed FHA or USDA loan, these are great options that are a bit more localized. 

6. Home Renovation Loans

Interested in purchasing a fixer-upper? There are loans available specifically for you. FHA 203(k) loans, for example, take into account what the value of the property will be after you renovate it, ensuring you’re able to borrow sufficient funds in order to complete the improvements. Likewise, similar programs exist through Freddie Mac and Fannie Mae, with the CHOICERenovation loan program and HomeStyle program available respectively. Both tend to over decent loan rates, making them great for first-time home buying on a budget.

7. Dollar Homes

The HUD just keeps on giving! Through its Dollar Homes program, the HUD offers single-family homes that are acquired by the Federal Housing Administration as a result of a foreclosure. While the term “dollar” here simply signifies that the houses are cheap, you are still able to find homes for as low as $10,000 and all the way up to about $200-300,000. If you’re simply interested in finding a cheaper home, this is a great place to start your search.

8. Homeownership Voucher Program

Through the HUD, you might be eligible for the Homeownership Voucher Program as long as you currently live in public housing or are from a low-income family. You must meet a minimum income requirement to be eligible and you’re also required to complete a homeownership and housing counseling program.

How to Save for Your First Home

Buying a home is a big financial decision. And, regardless of which kind of home buyer resources you use, you’ll want to ensure you’re saving well on mortgages. But how to get better rates on mortgages? You probably have already known: a good credit score is necessary! If you're looking for a way to start building your credit or improve your credit score, getting a credit builder loan can be a great way. Cheese Credit Builder is a great tool to build your credit score and save money at the same time. Simply apply for a credit builder loan of as little as $500 and choose a term length of 12 or 24 months. Use our autosave feature to make on-time payments and build a great credit history little by little. Cheese reports all your on-time payments to 3 credit bureaus.

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