Conventional 3% down
Many first-time buyers qualify for a conventional loan with as little as 3% down. Mortgage insurance can drop off once you reach 20% equity.
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Learning CenterFirst-time buyer programs
If you have not owned a home in the past three years, you likely count as a first-time buyer. That can open local down payment assistance on top of national options like 3% down conventional, 3.5% down FHA, and 0% down VA or USDA. The right mix depends on your income, credit, and price range.
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Who qualifies
What counts as a first-time homebuyer?
For most programs, you are a first-time homebuyer if you have not owned a principal residence in the past three years. That means many people who owned a home years ago qualify again. Some programs also count single parents who only owned with a former spouse, or people who owned a home not permanently affixed to a foundation. Each program sets its own definition, and some local programs drop the first-time requirement entirely—so it is always worth asking.
Quick check
Sold your last home four years ago? You likely qualify as first-time again. Currently own a home or own one jointly with someone? You likely don't—though some programs and national loan options don't require first-time status at all.
Local programs
Down payment help
Down payment help
Down payment help
What first-time buyer programs are available?
State housing finance agencies, counties, and cities offer grants, forgivable loans, and deferred second mortgages that help with down payment and closing costs. These are programs a loan officer sees used locally:
FHA loans — 3.5% down
FHA loans allow 3.5% down with flexible credit guidelines, and the down payment can come from gift funds or eligible assistance.
Program details (opens in new tab) →VA & USDA — $0 down for those who qualify
VA loans serve eligible veterans, service members, and surviving spouses; USDA loans serve eligible rural and suburban buyers. Both can mean no down payment.
Program details (opens in new tab) →Program terms, income limits, and funding change often—confirm at the official source. Updated .
Down payment assistance and first-time buyer programs vary by state; a loan officer licensed in your state can confirm what's available to you. Nationwide options many first-time buyers start with:
For a full rundown of local costs and neighborhoods, see the homebuying guide.
National options
Which national loan programs help first-time buyers?
Conventional 3% down
Fannie Mae and Freddie Mac offer low-down-payment options with as little as 3% down, some with income limits and reduced mortgage insurance. PMI can be removed later.
Conventional →FHA 3.5% down
Flexible credit guidelines and 3.5% down with qualifying scores. No first-time requirement. Pairs well with many DPA programs.
FHA →VA 0% down
For eligible veterans, service members, and some surviving spouses. No monthly mortgage insurance; a funding fee usually applies.
VA →USDA 0% down
For eligible rural and suburban areas when household income fits USDA limits. Includes an upfront and annual guarantee fee.
USDA →
Side by side
How do these programs compare?
| Program | Minimum down | Mortgage insurance | Good fit when |
|---|---|---|---|
| Conventional low-down | 3% | PMI, removable with equity | Credit is solid and you want PMI to go away later |
| FHA | 3.5% | Upfront + annual MIP | Credit is still building or DTI is higher |
| VA | 0% | None monthly; funding fee | You have VA eligibility |
| USDA | 0% | Guarantee fees | The property and income fit USDA rules |
| Local DPA | Varies | Follows the first mortgage | You need help with down payment or closing costs |
Illustrative example: $280,000 home
FHA at 3.5% down = $9,800. Conventional at 3% = $8,400. With a local assistance program covering some of that, cash to close can drop further. Illustrative only, not a commitment to lend.
Stacking
Can I combine a loan program with down payment assistance?
Usually, yes. Most assistance is designed to sit alongside a first mortgage—often FHA or conventional, sometimes VA or USDA. A few things to know:
- Income and price limits commonly apply, and they vary by county and household size.
- Homebuyer education is often required. It's usually online and can be completed in an afternoon.
- Repayment terms differ. Some help is a true grant; others are forgivable over time or repaid when you sell or refinance.
- Rate tradeoffs. Some assistance comes with a slightly higher first-mortgage rate. Compare the total cost, not just the cash.
- Funding windows. Programs can pause when funds run out, so timing matters.
Get the full picture on our first-time buyers page, run numbers in the affordability calculator, or browse all loan programs.
Step by step
How do I stack down payment assistance with a first mortgage?
Check eligibility early
Compare your household income, target price, and county against each program's limits before you shop.
Choose the first mortgage
Pick FHA, conventional, VA, or USDA based on credit and down payment—then confirm which DPA programs pair with it.
Get pre-approved with DPA built in
Your pre-approval should show the assistance, the first-mortgage rate that comes with it, and your estimated cash to close.
Complete homebuyer education
Finish any required course and keep the certificate—many programs need it before closing.
Write an offer that fits the rules
Stay within price limits and leave enough time in the contract for program approval.
Reserve funds and close
The lender reserves the assistance once you are under contract; both loans close together.
Avoid these
What are common first-time buyer program mistakes?
- Assuming you earn too much. Limits are often higher than people expect, especially for larger households.
- Only comparing the cash. A program that saves $5,000 upfront but raises your rate may cost more over time if you stay long.
- Skipping the fine print. Know whether help is a grant, forgivable, or repaid when you sell or refinance.
- Waiting on the course. Leaving education until after you're under contract can delay closing.
- Shopping above the price cap. Falling in love with a home over the limit means losing the assistance.
- New credit before closing. A car loan or new card can change your approval.
Straight answers
Frequently asked questions
What is the definition of a first-time homebuyer?
For most programs, someone who has not owned a principal residence in the past three years. Specific programs can have additional exceptions or rules.
What first-time buyer programs exist?
Options typically include state housing finance agency programs plus city or county assistance. See the local program cards on this page and ask a loan officer which ones fit your income and price.
Do I have to be a first-time buyer to get FHA?
No. FHA has no first-time buyer requirement. Some conventional 3% options and many DPA programs do have first-time or income rules.
Is down payment assistance free money?
Sometimes. Some programs are grants; others are forgivable or deferred loans that may be repaid when you sell or refinance. Always read the terms.
Do I need a homebuyer education course?
Many assistance programs and some low-down conventional options require one. Courses are usually online, take a few hours, and may cost little or nothing. Keep the certificate for your lender.
Are there income limits for first-time buyer programs?
Often. Many assistance programs and some 3% down conventional options cap household income, usually based on area median income and household size. FHA and VA have no income limits; USDA does.
Educational answers only—not a loan offer or commitment to lend. Examples are illustrative only, not a commitment to lend.
Find the program that fits you
We will check local assistance and national options against your income, credit, and target price. Call a loan officer at (480) 233-7897.