You may be eligible if you meet the following criteria:
- You’re either a first-time or repeat homebuyer
- You have a minimum 620 credit score
- You earn a maximum of 80% of your local area median income (AMI)
FHA loan
A Federal Housing Administration (FHA)-backed mortgage could be an excellent option for first-time homeowners (and repeat buyers) with less-than-perfect credit and limited financial reserves. Borrowing requirements for FHA loans are less strict than those for conventional loans, with a minimum credit score of 500 required to qualify. The disadvantage is that you must pay mortgage insurance fees for the life of the loan unless you put down at least 10%, in which case you can cancel MIP after 11 years.
You may be eligible if you meet the following criteria:
- You have a 500-579 credit score and a 10% down payment
- You have a 580 credit score and a 3.5% down payment
- You’re buying a one- to four-unit property as your primary residence
HUD’s Good Neighbor Next Door program
Though it is not necessarily limited to first-time homebuyers, the Department of Housing and Urban Development’s (HUD) Good Neighbor Next Door program can help you save up to 50% off the list price of a property. Borrowers must acquire a home in an area selected for revitalization to supporting specific communities.
You may be eligible if you meet the following criteria:
- You’re an educator, emergency medical technician, firefighter, or law enforcement, officer
- You commit to living in the property for at least three years
- You agree to borrow a silent second mortgage for the amount of the home price discount
VA loan
Active-duty military personnel, veterans, and eligible spouses may qualify for a loan guaranteed by the United States Department of Veterans Affairs. The benefit here is that you will not be required to make a down payment to qualify for a VA loan. VA borrowers are also exempt from paying mortgage insurance premiums.
In addition, the VA provides funding for modified homes. These can assist you in purchasing an adapted home or making an existing home more accessible to accommodate a service-related handicap.
- You’re a military service member, veteran, or eligible spouse
- You have a Certificate of Eligibility from the VA
- You have a minimum 620 credit score typically required by VA-approved lenders