Georgia First-Time Home Buying Assistance Programs & Grants for 2025
Georgia First-Time Home-Buying Assistance Programs & Grants
(Last Updated – 06/2025)
Georgia, one of the fast-growing Southeastern states, saw its median sale price rise to $381,000 in April 2025, up 1.4% over the same period the previous year, according to real estate firm Redfin. The number of homes sold fell 4.1% during the same period.
Georgia still shows signs of a competitive market, with an average of one in five homes selling above list price. First-time buyers might feel intimidated, but help awaits those who qualify.
Who Is Considered a First-Time Homebuyer in Georgia?
The definition of first-time homebuyer is broader than many people think.
The Georgia Department of Community Affairs treats anyone who has not owned a home in the past three years as a first-time homebuyer. That jibes with the federal government’s definition.
In some targeted areas of the state, repeat buyers may also apply for first-time homebuyer programs. And typically veterans need not be first-time buyers.
If you’re on a tight budget and want to live in Georgia, take a look at this list of the best affordable places to live in Georgia before you begin your search and commit to a home mortgage loan.
3 Georgia Programs for First-Time Homebuyers
The Georgia Department of Community Affairs oversees a busy first-time homebuyer program. And several areas of Georgia, especially Atlanta, the state capital and largest city, offer extensive assistance for low- and moderate-income buyers.
1. Georgia Dream
The Georgia Dream homeownership program offers a 30-year fixed-rate conventional loan or government-backed FHA, USDA, or VA loan with competitive interest rates available to first-time buyers.
Buyers must meet certain income and purchase price limits . They must also contribute at least $1,000 of their own funds toward the home purchase, but they may not have more than $20,000 or 20% of the home purchase price (whichever is greater) in liquid assets.
A FICO® credit score of 640 or above is required. So is the completion of a homebuyer education course or counseling session, which can help buyers understand how much mortgage they can afford.
It’s also worth noting that Georgia has recently introduced the Peach Plus loan program. WIth no first-time homebuyer focus, the program is available to would-be borrowers who qualify for FHA or VA loans but who may need nonconforming loans. Property and income limits are accordingly higher.
Another recent extension is the Peach Select Veterans Assistance loan program. This provides low-rate mortgage loans with no down payment for people who qualify for VA loans. These loans require a contribution of only $500 toward the home purchase and don’t include down payment assistance, though they can be combined with down payment assistance programs.
2. Georgia Dream Down Payment Assistance
The Georgia Dream mortgage loans can be paired with first-time homebuyer down payment assistance up to $10,000. This second loan is zero interest with no monthly payments. It’s due upon sale of the house or refinance of the first mortgage.
Some people, including public servants such as protectors, educators or health care professionals, active-duty military members, and buyers with a family member who is disabled, may qualify for as much as $12,500 in down payment assistance.
3. Local First-Time Homebuyer Assistance
Atlanta, Macon, and Savannah all have active homeownership assistance programs. Invest Atlanta , for instance, offers several down payment assistance programs in several areas of the city.
Be sure to check with the city, county, and local community and home advocate organizations for additional resources for first-time buyers.
Recommended: Understanding the Different Types of Mortgage Loans
How to Apply to Georgia Programs for First-Time Homebuyers
The Georgia Department of Community Affairs website offers a complete description of the Georgia Dream program. It is not a lender but it does list participating lenders throughout the state. It also provides contact information for homebuyer education classes and counseling, which is required for all Georgia Dream applicants.
Federal Programs for First-Time Homebuyers
Several federal government programs are designed for people who have low credit scores or limited cash for a down payment. Although most of these programs are available to repeat homeowners, like state programs, they can be especially helpful to people who are buying a first home or who haven’t owned a home in several years.
The mortgages are generally for single-family homes, two- to four-unit properties that will be owner occupied, approved condos, townhomes, planned unit developments, and some manufactured homes.
Federal Housing Administration (FHA) Loans
The FHA, which is part of the U.S. Department of Housing and Urban Development (HUD), insures mortgages for borrowers with lower credit scores. Homebuyers choose from a list of approved lenders that participate in the FHA loan program. Loans have competitive interest rates and require a down payment of 3.5% of the purchase price for borrowers, who typically need FICO® credit scores of 580 or higher. Those with scores as low as 500 must put at least 10% down.
In addition to checking your credit score, lenders will look at your debt-to-income ratio (DTI, your monthly debt payments compared with your monthly gross income). FHA loans allow a DTI ratio of up to 57% in some cases, vs. a typical 45% maximum for a conventional loan.
Gift money for the down payment is allowed from certain donors and will be documented in a gift letter for the mortgage.
FHA loans always require mortgage insurance: a 1.75% upfront fee and annual premiums for the life of the loan, unless you make a down payment of at least 10%, which allows the removal of mortgage insurance after 11 years. For a $300,000 mortgage balance, upfront MIP would be around $5,250 and monthly MIP, at a rate of 0.55%, would be around $137. You can learn more about these loans, including FHA loans for refinance and rehab of properties, by reading up on FHA requirements, loan limits, and rates.
Freddie Mac Home Possible Mortgages
Very low- and low-income borrowers may make a 3% down payment on a Home Possible® mortgage. These loans allow various sources for down payments, including co-borrowers, family gifts, employer assistance, secondary financing, and sweat equity.
The Home Possible mortgage is for buyers who have a credit score of at least 660.
Once you pay 20% of your loan, the Home Possible mortgage insurance will be canceled, which will lower your mortgage payments.
Fannie Mae HomeReady Mortgages
Fannie Mae HomeReady® Mortgages allow down payments as low as 3% for low-income borrowers. Applicants generally need a credit score of at least 620; pricing may be better for credit scores of 680 and above. Like the Freddie Mac program, HomeReady loans allow flexibility for down payment financing, such as gifts and grants.
For income limits, a comparison to an FHA loan, and other information, go to this Fannie Mae site .
Fannie Mae Standard 97 LTV Loan
The conventional 97 LTV loan is for first-time homebuyers of any income level who have a credit score of at least 620 and meet debt-to-income criteria. The 97% loan-to-value mortgage requires 3% down. Borrowers can get down payment and closing cost assistance from third-party sources.
Department of Veterans Affairs (VA) Loans
Eligible active-duty members of the military, veterans, reservists, and surviving spouses may apply for loans backed by the Department of Veterans Affairs. VA loans, which can be used to buy, build, or improve homes, have lower interest rates than most other mortgages and don’t require a down payment. Most borrowers pay a one-time funding fee that can be rolled into the mortgage.
Another benefit of VA loans is that they do not require private mortgage insurance (PMI) for borrowers who make a down payment of less than 20%. And they have more flexible credit score requirements. In some cases, even those who have previously been in foreclosure or bankruptcy can qualify.
Borrowers applying for a VA loan will need a Certificate of Eligibility from the VA so make sure to review a guide to qualifying for a VA loan as a first step in the process.
Native American Veteran Direct Loans (NADLs)
Eligible Native American veterans and their spouses may use these no-down-payment loans to buy, improve, or build a home on federal trust land. Unlike VA loans listed above, the Department of Veterans Affairs is the mortgage lender on NADLs. The VA requires no mortgage insurance, but it does charge a funding fee. You can learn more by emailing [email protected].
US Department of Agriculture (USDA) Loans
No down payment is required on these loans to moderate-income borrowers that are guaranteed by the USDA in specified rural areas. Borrowers pay an upfront guarantee fee and an annual fee that serves as mortgage insurance.
The USDA also directly issues loans to low- and very low-income people. For loan basics and income and property eligibility, head to this USDA site .
HUD Good Neighbor Next Door Program
This program helps police officers, firefighters, emergency medical technicians, and teachers qualify for mortgages in the areas they serve. Borrowers can receive 50% off a home in what HUD calls a “revitalization area.” They must live in the home for at least three years. For more information, visit the HUD program page.
Georgia First-Time Homebuyer Stats for 2025
Here is a snapshot of the recent Georgia home buying experience.
• Median home sale price in Georgia: $381,000
• 3% down payment: $11,430
• 20% down payment: $76,200
• Percentage of buyers nationwide who are first-time buyers: 24%
• Median age of first-time homebuyers: 38
• Average credit score: 695 (vs. average U.S. score of 715)
• Georgia cost of living: Twelfth lowest in the country
Financing Tips for First-Time Homebuyers
In addition to federal and state government-sponsored lending programs, there are other financial strategies that may help you become a homeowner. Some examples:
• Traditional IRA withdrawals. The IRS allows qualifying first-time homebuyers a one-time, penalty-free withdrawal of up to $10,000 from their IRA if the money is used to buy, build, or rebuild a home. The IRS considers anyone who has not owned a primary residence in the past two years a first-time homebuyer. You will still owe income tax on the IRA withdrawal. If you’re married and your spouse has an IRA, they may also make a penalty-free withdrawal of $10,000 to purchase a home. The downside, of course, is that large withdrawals may jeopardize your retirement savings.
• Roth IRA withdrawals. Because Roth IRA contributions are made with after-tax money, the IRS allows tax- and penalty-free withdrawals of contributions for any reason as long as you’ve held the account for five years. You may also withdraw up to $10,000 in earnings from your Roth IRA without paying taxes or penalties if you are a qualifying first-time homebuyer and you have had the account for five years. With accounts held for less than five years, homebuyers will pay income tax on earnings withdrawn.
• 401(k) loans. If your employer allows borrowing from the 401(k) plan that it sponsors, you may consider taking a loan against the 401(k) account to help finance your home purchase. With most plans, you can borrow up to 50% of your 401(k) balance, up to $50,000, within a 12-month period without incurring taxes or penalties. You pay interest on the loan, which is paid into your 401(k) account. You usually have to pay back the loan within five years, but if you’re using the money to buy a house, you may have longer to repay.
• State and local down payment assistance programs. Usually offered at the regional or county level, these programs provide flexible second mortgages for first-time buyers looking into how to afford a down payment.
• The mortgage credit certificate program. First-time homeowners and those who buy in targeted areas can claim a portion of their mortgage interest as a tax credit, up to $2,000. Any additional interest paid can still be used as an itemized deduction. To qualify for the credit, you must be a first-time homebuyer, live in the home, and meet income and purchase price requirements, which vary by state. If you refinance, the credit disappears, and if you sell the house before nine years, you may have to pay some of the tax credit back. There are fees associated with applying for and receiving the mortgage credit certificate that vary by state. Often the savings from the lifetime of the credit can outweigh these fees.
• Your employer. Your employer may offer access to lower-cost lenders and real estate agents in your area, as well as home-buying education courses.
• Your lender. Always ask your lender about any first-time homebuyer grant or down payment assistance programs available from government, nonprofit, and community organizations in your area.
The Takeaway
The Peach State has opportunities for low- and moderate-income first-time homebuyers through the Georgia Dream program. Other first-timers can look into local initiatives as well as government-backed and conventional loans.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.
FAQ
Should I take first-time homebuyer classes?
It won’t hurt. Good information is key to a successful home-buying experience, especially for newcomers, who can easily be overwhelmed by the jargon, technicalities, and magnitude of securing a mortgage and purchasing a home. First-time homebuyer classes can help. Indeed they are required for some government-sponsored loan programs.
Do first-time homebuyers with bad credit qualify for homeownership assistance?
Often they do. Many government and nonprofit homeowner assistance programs are available to people with low credit scores. And often, interest rates and other loan pricing are competitive with those of loans available to borrowers with higher credit scores. That said, almost any lending program has credit qualifications. That’s why it’s important to take all possible steps to improve your credit standing before you go house hunting.
Is there a first-time homebuyer tax credit in Georgia?
No, there is not a first-time homebuyer mortgage tax credit in Georgia. Like all homeowners, Georgia residents can take advantage of the federal tax deduction for mortgage interest paid.
Is there a first-time veteran homebuyer assistance program in Georgia?
The Georgia Dream Homeownership program includes the Peach Select Veterans Assistance loan program and enhanced down payment assistance for active military members. Eligible Georgia veterans may find options in the federal VA loan programs listed above.
What credit score do I need for first-time homebuyer assistance in Georgia?
Applicants for the Georgia Dream program must have a credit score of 640 or above.
What is the average age of first-time homebuyers in Georgia?
If Georgians are anything like their national peers, they’re 38 when buying a first home.
Photo credit: iStock/novikat
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Illinois First-Time Home Buying Assistance Programs & Grants for 2025
Illinois First-Time Home-Buying Assistance Programs & Grants
(Last Updated – 06/2025)
With median home sale prices now above $300,000 in Illinois, according to Redfin, diving into the market as a first-time buyer in the state can be daunting. Home prices in Illinois were up 5.9% year-over-year as of April 2025, with the median home sale price hitting $312,700 (which is, interestingly enough, right around the U.S. median home sale price).
But in some communities, the price increases have been even more steep. In Forest Park, Alton, and Kankakee, Illinois, prices have risen by more than 40% year-over-year. Forest Park’s median home price is now edging close to the half-million-dollar mark.
Buyers may feel as if the keys to their first home are dangling further out of reach, but fortunately, the state and some counties offer financial assistance. There also are longstanding federal programs that could improve a buyer’s chances of success.
6 Illinois Programs for First-Time Homebuyers
Most first-time homebuyer programs in Illinois are designed to help low- to moderate-income buyers who need help coming up with a down payment and/or closing costs.
As with any home mortgage loan, participants may have to meet requirements regarding income, credit scores, and debt-to-income ratio to qualify. Typically, the home must be the buyer’s primary residence, and the cost may be capped. At least one of the buyers may have to complete a homebuyer education course.
The Illinois Housing Development Authority provides several options for first-time buyers in the Prairie State. Here are the details.
Recommended: Understanding Mortgage Basics
1. IHDA Access Forgivable
The IHDA Access Forgivable program offers qualifying buyers a forgivable second loan they can put toward their down payment, closing costs, or both. This is designed to be used alongside one of the different types of mortgages already available, including FHA, VA, USDA, and Fannie Mae HFA Preferred home loans.
Participants have the option of choosing from different types of mortgages, including an FHA, VA, USDA, and Fannie Mae HFA Preferred home loans.
Availability: Statewide
Assistance Amount: 4% of the home’s purchase price, up to $6,000, for down payment and closing costs
Type of Assistance: Second loan forgiven monthly over 10 years
Benefits and Qualifications Include:
• Available to first-time and repeat homebuyers purchasing a primary residence
• Borrowers must contribute $1,000 or 1% of the purchase price, whichever is greater
• Minimum credit score of 640
• Household income and purchase price limits based on location
• Existing and new construction homes are eligible
• Must complete homeownership education course
To Apply: Contact an approved lender .
2. IHDA Access Deferred
The IHDA Access Deferred program also offers down payment assistance for a primary residence. But with this program, the second mortgage is an interest-free 30-year loan. The borrower doesn’t have to repay the second loan until the home is sold, refinanced, or paid off, or until 30 years elapse. Borrowers can pair this with FHA, VA, USDA, and Fannie Mae HFA Preferred loans.
Availability: Statewide
Assistance Amount: 5% of the home’s purchase price, up to $7,500, for a down payment and closing costs
Type of Assistance: Interest-free second loan is deferred for life of the 30-year mortgage
Benefits and Qualifications Include:
• Available to first-time and repeat homebuyers
• Borrowers must contribute $1,000 or 1% of the purchase price, whichever is greater
• Minimum credit score of 640
• Household income and purchase price limits based on location
• Existing and new construction homes are eligible
• Must complete homeownership education course
To Apply: Contact an approved lender .
3. IHDA Access Repayable
IHDA Access Repayable provides an interest-free second loan that can be used for a down payment and closing costs. This loan is repaid in monthly installments over a 10-year period. As with other IHDA assistance, the loan is to be used alongside FHA, VA, USDA, or Fannie Mae HFA Preferred loans.
Availability: Statewide
Assistance Amount: 10% of the home’s purchase price, up to $10,000, for down payment and closing costs
Type of Assistance: Interest-free second loan is repaid monthly for 10 years
Benefits and Qualifications Include:
• Available to first-time and repeat homebuyers for a primary residence
• Borrowers must contribute $1,000 or 1% of the purchase price, whichever is greater
• Minimum credit score of 640
• Household income and purchase price limits based on location
• Existing and new construction homes are eligible
• Must complete homeownership education course
To Apply: Again, contact an approved lender .
4. Illinois State Treasurer’s Office Finally Home
The Finally Home program, which is administered by the Illinois State Treasurer’s Office, was designed to help Illinois homebuyers who are having trouble qualifying for a conventional mortgage or refinancing because of limited or damaged credit or a high debt-to-income ratio. The program offers a five-year 10% mortgage guarantee to participating lenders.
Availability: Statewide
Assistance Amount: Five-year 10% loan guarantee
Type of Assistance: Guarantee becomes payable to participating lender if loan goes into default
Benefits and Qualifications Include:
• Borrower must contribute at least 3.5% toward down payment
• Household income cannot exceed 150% of the U.S. Department of Housing and Urban Development’s median family income for the area (based on household size)
• Home price cannot exceed conforming loan limits established by Fannie Mae
• Must be unable to meet lender’s conventional mortgage guidelines
More Information: Head here.
To Apply: Search for lenders using the Finally Home program name. The lender you choose will submit the Finally Home program application for you as part of the loan process. If approved, the lender will contact you directly to discuss the details of the loan. If you can’t find a lender, you can get assistance by emailing [email protected] or by calling (866) 458-7327.
5. Federal Home Loan Bank of Chicago Downpayment Plus
The Federal Home Loan Bank of Chicago offers two down payment and closing cost assistance programs to qualifying borrowers. Downpayment Plus®
provides income-eligible Federal Home Loan Bank of Chicago customers with a matching grant that is forgiven on a monthly basis over a five-year period.
Availability: Statewide through Federal Home Loan Bank of Chicago lenders
Assistance Amount: Maximum amount is the lesser of $10,000 or 25% of the first mortgage amount
Assistance Type: Grant is forgiven on monthly basis over a five-year period
Benefits and Qualifications Include:
• Easy-to-access down payment and closing cost assistance
• Grants are offered on a first-come, first-served basis
• Borrowers must apply for first mortgage financing with a participating Chicago bank member
• Must provide an executed purchase contract
• Must provide evidence of household income
• Must complete both pre-purchase homebuyer education and counseling
• Must contribute at least $1,000 toward home purchase
To Apply: Contact a participating lender or FHLBank Chicago Community Investment at [email protected].
6. Federal Home Loan Bank of Chicago Downpayment Plus Advantage
Downpayment Plus Advantage® is similar to Downpayment Plus, but the grants are limited to homebuyers who are participating in a homeownership program offered by a nonprofit organization that provides mortgage financing directly to the homebuyer.
The nonprofit organization must partner with a Federal Home Loan Bank of Chicago member financial institution to access DPP Advantage funds.
Availability: Grants provided through nonprofits that provide direct first mortgages to qualifying homebuyers
Assistance Amount: Maximum amount is the lesser of $10,000 or 25% of the first mortgage amount
Type of Assistance: Grant is forgiven on monthly basis over a five-year period
Benefits and Qualifications Include:
• Borrowers must apply for first mortgage financing with a participating nonprofit group
• Must provide executed purchase contract
• Must provide evidence of household income
• Must complete both pre-purchase homebuyer education and counseling
• Must contribute at least $1,000 toward home purchase
To Apply: Contact a nonprofit organization, such as Habitat for Humanity, that originates first mortgages.
Who Is Considered a First-Time Homebuyer in Illinois?
A first-time homebuyer is typically defined as someone who hasn’t owned a primary home for at least three years.
Illinois doesn’t have that qualification for its down payment assistance programs, but it’s always a good idea to be clear on all eligibility requirements before applying for any program. Homebuyers who aren’t sure where they might want to live in Illinois can check out this list of the best affordable places to live in Illinois.
Recommended: First-Time Homebuyer Guide
Federal Programs for First-Time Homebuyers
Several federal government programs are designed for people who have low credit scores or limited cash for a down payment. Although most of these programs are available to repeat homeowners, like state programs, they can be especially helpful to people who are buying a first home or who haven’t owned a home in several years.
The mortgages are generally for single-family homes, two- to four-unit properties that will be owner occupied, approved condos, townhomes, planned unit developments, and some manufactured homes.
Some of these loan programs can be paired with down payment assistance from the Illinois Housing Development Authority.
Federal Housing Administration (FHA) Loans
The FHA, which is part of the U.S. Department of Housing and Urban Development (HUD), insures mortgages for borrowers with lower credit scores. Homebuyers choose from a list of approved lenders that participate in the FHA loan program. Loans have competitive interest rates and require a down payment of 3.5% of the purchase price for borrowers, who typically need FICO® credit scores of 580 or higher. Those with scores as low as 500 must put at least 10% down.
In addition to examining your credit score, lenders will look at your debt-to-income ratio (DTI, your monthly debt payments compared with your monthly gross income). FHA loans allow a DTI ratio of up to 57% in some cases, vs. a typical 45% maximum for a conventional loan.
Gift money for the down payment is allowed from certain donors and will be documented in a gift letter for the mortgage.
FHA loans always require mortgage insurance: a 1.75% upfront fee and annual premiums for the life of the loan, unless you make a down payment of at least 10%, which allows the removal of mortgage insurance after 11 years. For a $300,000 mortgage balance, upfront MIP would be around $5,250 and monthly MIP, at a rate of 0.55%, would be around $137. You can learn more about these loans, including FHA loans for refinance and rehab of properties, by reading up on FHA requirements, loan limits, and rates.
Freddie Mac Home Possible Mortgages
Very low- and low-income borrowers may make a 3% down payment on a Home Possible® mortgage. These loans allow various sources for down payments, including co-borrowers, family gifts, employer assistance, secondary financing, and sweat equity.
The Home Possible mortgage is for buyers who have a credit score of at least 660.
Once you pay 20% of your loan, the Home Possible mortgage insurance will be canceled, which will lower your mortgage payments.
Fannie Mae HomeReady Mortgages
Fannie Mae HomeReady® Mortgages allow down payments as low as 3% for low-income borrowers. Applicants generally need a credit score of at least 620; pricing may be better for credit scores of 680 and above. Like the Freddie Mac program, HomeReady loans allow flexibility for down payment financing, such as gifts and grants.
For income limits, a comparison to an FHA loan, and other information, go to this Fannie Mae site .
Fannie Mae Standard 97 LTV Loan
The conventional 97 LTV loan is for first-time homebuyers of any income level who have a credit score of at least 620 and meet debt-to-income criteria. The 97% loan-to-value mortgage requires 3% down. Borrowers can get down payment and closing cost assistance from third-party sources.
Department of Veterans Affairs (VA) Loans
Eligible active-duty members of the military, veterans, reservists, and surviving spouses may apply for loans backed by the Department of Veterans Affairs. VA loans, which can be used to buy, build, or improve homes, have lower interest rates than most other mortgages and don’t require a down payment. Most borrowers pay a one-time funding fee that can be rolled into the mortgage.
Another benefit of VA loans is that they do not require private mortgage insurance (PMI) for borrowers who make a down payment of less than 20%. And they have more flexible credit score requirements. In some cases, even those who have previously been in foreclosure or bankruptcy can qualify.
Borrowers applying for a VA loan will need a Certificate of Eligibility from the VA so make sure to review a guide to qualifying for a VA loan as a first step in the process.
Native American Veteran Direct Loans (NADLs)
Eligible Native American veterans and their spouses may use these no-down-payment loans to buy, improve, or build a home on federal trust land. The VA is the direct lender and charges a funding fee.
US Department of Agriculture (USDA) Loans
No down payment is required on these loans to moderate-income borrowers that are guaranteed by the USDA in specified rural areas. Borrowers pay an upfront guarantee fee and an annual fee that serves as mortgage insurance.
The USDA also directly issues loans to low- and very low-income people. Look here for income and property eligibility.
HUD Good Neighbor Next Door Program
This program helps police officers, firefighters, emergency medical technicians, and teachers qualify for mortgages in the areas they serve. Borrowers can receive 50% off a home in a “revitalization area.” They must live in the home for at least three years. For more information, visit the HUD program page.
First-Time Homebuyer Stats for 2025
• Percentage of buyers nationwide who are first-time buyers: 24%
• Median age of first-time homebuyers: 38
• Median home price in Illinois: $312,700
• 3% down payment in Illinois: $9,381
• 20% down payment in Illinois: $62,540
• 66.8% of homes in Illinois are owner-occupied
• Average credit score in Illinois: 720
Additional Financing Tips for First-Time Homebuyers
In addition to federal and state government-sponsored lending programs, there are other financial strategies that may help you become a homeowner. Some examples:
• Traditional IRA withdrawals. The IRS allows qualifying first-time homebuyers a one-time, penalty-free withdrawal of up to $10,000 from their IRA if the money is used to buy, build, or rebuild a home. For this purpose, the IRS considers anyone who has not owned a primary residence in the past two years a first-time homebuyer. You will still owe income tax on the IRA withdrawal. If you’re married and your spouse has an IRA, they may also make a penalty-free withdrawal of $10,000 to purchase a home. The downside, of course, is that large withdrawals may jeopardize your retirement savings.
• Roth IRA withdrawals. Because Roth IRA contributions are made with after-tax money, the IRS allows tax- and penalty-free withdrawals of contributions for any reason as long as you’ve held the account for five years. You may also withdraw up to $10,000 in earnings from your Roth IRA without paying taxes or penalties if you are a qualifying first-time homebuyer and you have had the account for five years. With accounts held for less than five years, homebuyers will pay income tax on earnings withdrawn.
• 401(k) loans. If your employer allows borrowing from the 401(k) plan that it sponsors, you may consider taking a loan against the 401(k) account to help finance your home purchase. With most plans, you can borrow up to 50% of your 401(k) balance, up to $50,000 in a 12-month period, without incurring taxes or penalties. You pay interest on the loan, which is paid into your 401(k) account. You usually have to pay back the loan within five years, but if you’re using the money to buy a house, you may have up to 15 years to repay.
• State and local down payment assistance programs. Usually offered at the regional or county level, these programs provide flexible second mortgages for first-time buyers looking into how to afford a down payment.
• The mortgage credit certificate program. First-time homeowners and those who buy in targeted areas can claim a portion of their mortgage interest as a tax credit, up to $2,000. Any additional interest paid can still be used as an itemized deduction. To qualify for the credit, you must be a first-time homebuyer, live in the home, and meet income and purchase price requirements, which vary by state. If you refinance, the credit disappears, and if you sell the house before nine years, you may have to pay some of the tax credit back. There are fees associated with applying for and receiving the mortgage credit certificate that vary by state. Often the savings from the lifetime of the credit can outweigh these fees.
• Your employer. Your employer may offer access to lower-cost lenders and real estate agents in your area, as well as home buying education courses.
• Your lender. Always ask your lender about any first-time homebuyer grant or down payment assistance programs available from government, nonprofit, and community organizations in your area.
The Takeaway
Being a first-time homebuyer can be especially challenging, but if you can qualify for one of the many homebuyer programs in Illinois, or a federal program (or both) you may be able to reduce costs. While you’re considering your options, keep in mind that borrowers who go with a mortgage from a private lender don’t necessarily have to come up with a 20% down payment. (And most buyers don’t.)
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.
FAQ
Should I take first-time homebuyer classes?
A first-time homebuyer class can help demystify the jargon and technicalities that surround applying for a mortgage and purchasing a home. Indeed, classes are required for some government-sponsored loan programs.
Do first-time homebuyers with bad credit qualify for homeownership assistance?
Often they do. Many government and nonprofit homeowner assistance programs are available to people with low credit scores. And interest rates and other loan pricing are often competitive with those of loans available to borrowers with higher credit scores. That said, almost any lending program has credit qualifications, so it’s important to take all possible steps to improve your credit standing before you go house hunting.
Is there a first-time homebuyer tax credit in Illinois?
Not right now. State and local agencies administer mortgage credit certificate programs that allow borrowers to claim a portion of their annual mortgage interest as a federal credit every year. Both the Illinois Housing Development Authority and city of Chicago’s programs have been suspended.
Is there a first-time homebuyer assistance program for veterans in Illinois?
The state housing authority includes VA loans in its assistance programs. VA-backed home loans are available nationwide to eligible service members, veterans, and eligible surviving spouses. If you’re a veteran and you and/or your spouse are Native American, you may qualify for a VA direct loan.
What credit score do I need for first-time homebuyer assistance in Illinois?
The Illinois Housing Development Authority’s homebuyer programs require a minimum credit score of 640.
What is the average age of first-time homebuyers?
The typical first-time buyer is 38 as of late 2024, an all-time high.
Photo credit: iStock/Lisa-Blue
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Qualifying for the reward requires using a real estate agent that participates in HomeStory’s broker to broker agreement to complete the real estate buy and/or sell transaction. You retain the right to negotiate buyer and or seller representation agreements. Upon successful close of the transaction, the Real Estate Agent pays a fee to HomeStory Real Estate Services. All Agents have been independently vetted by HomeStory to meet performance expectations required to participate in the program. If you are currently working with a REALTOR®, please disregard this notice. It is not our intention to solicit the offerings of other REALTORS®. A reward is not available where prohibited by state law, including Alaska, Iowa, Louisiana and Missouri. A reduced agent commission may be available for sellers in lieu of the reward in Mississippi, New Jersey, Oklahoma, and Oregon and should be discussed with the agent upon enrollment. No reward will be available for buyers in Mississippi, Oklahoma, and Oregon. A commission credit may be available for buyers in lieu of the reward in New Jersey and must be discussed with the agent upon enrollment and included in a Buyer Agency Agreement with Rebate Provision. Rewards in Kansas and Tennessee are required to be delivered by gift card.
HomeStory will issue the reward using the payment option you select and will be sent to the client enrolled in the program within 45 days of HomeStory Real Estate Services receipt of settlement statements and any other documentation reasonably required to calculate the applicable reward amount. Real estate agent fees and commissions still apply. Short sale transactions do not qualify for the reward. Depending on state regulations highlighted above, reward amount is based on sale price of the home purchased and/or sold and cannot exceed $9,500 per buy or sell transaction. Employer-sponsored relocations may preclude participation in the reward program offering. SoFi is not responsible for the reward.
SoFi Bank, N.A. (NMLS #696891) does not perform any activity that is or could be construed as unlicensed real estate activity, and SoFi is not licensed as a real estate broker. Agents of SoFi are not authorized to perform real estate activity.
If your property is currently listed with a REALTOR®, please disregard this notice. It is not our intention to solicit the offerings of other REALTORS®.
Reward is valid for 18 months from date of enrollment. After 18 months, you must re-enroll to be eligible for a reward.
SoFi loans subject to credit approval. Offer subject to change or cancellation without notice.
The trademarks, logos and names of other companies, products and services are the property of their respective owners.
SOHL-Q225-220
Florida First-Time Home Buying Assistance Programs & Grants for 2025
Florida First-Time Home Buying Assistance Programs & Grants
(Last Updated – 06/2025)
Florida’s fast-growing population, robust job growth, and new industries all make for a hot real estate market. Even though home prices dropped 3.2% in the last year to an average value of $389,400, they remain above the national average of $367,711 (rising 1.4%), according to Zillow.
If you are looking to break into the housing market, there’s help available. For those who qualify, the state offers programs to assist with down payment, mortgage, and closing costs. Here, take a look at some of the options available.
Florida Programs for First-Time Homebuyers
The Florida Housing Finance Corporation (also called FHFC or Florida Housing) offers first-time buyers a variety of assistance programs which typically include homebuyer education classes. These can help buyers understand how much mortgage they can afford and how the lending and closing processes work.
Here are details regarding available programs in Florida.
1. Florida Housing Finance Corporation’s Homebuyer Program
This program offers 30-year fixed-rate FHA, VA, and USDA government-backed loans as well as conventional loans that can be paired with FHFC’s down payment assistance second mortgages. (See below for details.)
Single-family homes, townhomes, approved condos, two- to four-unit homes with the buyer residing in one of the units, modular homes, and mobile homes are allowed.
Buyers must have a credit score of at least 640 and meet the income and purchase price limits in the county where the home is located.
2. Florida Assist Second Mortgage
This program offers up to $10,000 for down payment and closing costs via a 0% interest deferred second mortgage to be used only with a Florida Housing first mortgage.
The second loan is not forgivable, but repayment is deferred until the home is sold, the borrower moves, or the first mortgage is refinanced. Borrowers must meet the same requirements as they do for their first mortgage.
3. HFA Preferred and HFA Advantage Plus Second Mortgage
These forgivable second mortgages allow participants to borrow 3%, 4%, or 5% of the total loan amount for down payment and closing costs. There are no payments, and the loan is forgiven at 20% a year over a five-year term.
4. FL HLP Second Mortgage
The Florida Homeownership Loan Program (FL HLP) offers a loan up to $10,000 for down payment and closing costs with a 3.00% interest rate. The loan is paid over a 15-year term, unless the borrower moves, sells, or refinances, at which time the loan must be paid back in full.
Because there is a monthly payment associated with this loan, it will be considered in an applicant’s debt-to-income ratio when the homebuyer is applying for a first mortgage.
5. Local Homebuyer Assistance Programs
The Hometown Heroes program supports community workers such as law enforcement officers, firefighters, EMTs, educators, health care professionals, and child care operators or employees can receive up to 5% of the first mortgage amount (up to $35,000) in down payment and closing cost assistance if they are first-time homebuyers who meet income and purchase price limits and have a credit score of at least 640.
Military members and veterans are also eligible, and are exempt from the first-time homebuyer requirement.
The assistance takes the form of a 0% interest, 30-year deferred second mortgage that must be repaid if the borrower sells the home, moves, or refinances the first mortgage.
Hometown Heroes can also offer lower-than-market rates on an FHA, VA, USDA, Fannie Mae or Freddie Mac first mortgage and reduced upfront fees.
6. Local Homebuyer Programs
There are some city and area-specific homebuyer programs in areas such as Jacksonville that help first-time buyers in Florida. Be sure to check with the county, city, and local home advocacy organizations where you are buying for other assistance opportunities.
💡 Quick Tip: SoFi’s award-winning mortgage loan experience means a simple application — we even offer an on-time close guarantee. We’ve made $7.5 billion in home loans so we know a thing or two about what makes homebuyers happy.‡
Who Is Considered a First-Time Homebuyer in Florida?
The Florida Housing Finance Corporation is a 45-year-old state agency that provides affordable housing opportunities to first-time and low- to moderate-income homebuyers looking for their place in the Sunshine State.
It considers anyone who has not owned a primary home in the past three years a first-time homebuyer.
In some targeted areas of the state, repeat buyers may also apply for first-time homebuyer programs. And typically veterans need not be first-time buyers.
Recommended: Understanding the Different Types of Mortgage Loans
How to Apply to Florida Programs for First-Time Homebuyers
The Florida Housing website includes the Homebuyer Loan Program Wizard , an interactive tool that can help you determine your eligibility for Florida first-time homebuyer programs. Florida Housing is not a lender, but the Wizard tool provides a list of approved lenders by location.
It is especially important for first-time buyers, who may be unfamiliar with the mortgage lending process, to compare interest rates, fees, and other costs among lenders to find the most affordable loan. A first-time homebuyer guide can also be helpful in providing a foundation for your property pursuits.
Federal Programs for First-Time Homebuyers
Several federal government programs are designed for people who have low credit scores or limited cash for a down payment. Although most of these programs are available to repeat homeowners, like state programs, they can be especially helpful to people who are buying a first home or who haven’t owned a home in several years.
The mortgages are generally for single-family homes, two- to four-unit properties that will be owner occupied, approved condos, townhomes, planned unit developments, and some manufactured homes.
If you qualify for one of these loans through Florida Housing, that’s advantageous. If not, you can apply for them on your own. Notice that the credit score requirement could be higher with Florida Housing.
Federal Housing Administration (FHA) Loans
The FHA, which is part of the U.S. Department of Housing and Urban Development (HUD), insures mortgages for borrowers with lower credit scores. Homebuyers choose from a list of approved lenders that participate in the FHA loan program. Loans have competitive interest rates and require a down payment of 3.5% of the purchase price for borrowers, who typically need FICO® credit scores of 580 or higher. Those with scores as low as 500 must put at least 10% down.
In addition to examining your credit score, lenders will look at your debt-to-income ratio (DTI, your monthly debt payments compared with your monthly gross income). FHA loans allow a DTI ratio of up to 57% in some cases, vs. a typical 45% to 50% maximum for a conventional loan.
Gift money for the down payment is allowed from certain donors and will be documented in a gift letter for the mortgage.
FHA loans always require mortgage insurance: a 1.75% upfront fee and annual premiums for the life of the loan, unless you make a down payment of at least 10%, which allows the removal of mortgage insurance after 11 years. Here’s an example:
• For a $300,000 mortgage balance, upfront MIP would be around $5,250 and monthly MIP, at a rate of 0.55%, would be around $137.
You can learn more about these loans, including FHA loans for refinance and rehab of properties, by reading up on FHA requirements, loan limits, and rates.
Freddie Mac Home Possible Mortgages
Very low- and low-income borrowers may make a 3% down payment on a Home Possible® mortgage. These loans allow various sources for down payments, including co-borrowers, family gifts, employer assistance, secondary financing, and sweat equity.
The Home Possible mortgage is for buyers who have a credit score of at least 660.
Once you pay 20% of your loan, the Home Possible mortgage insurance will be canceled, which will lower your mortgage payments.
Fannie Mae HomeReady Mortgages
Fannie Mae HomeReady® Mortgages allow down payments as low as 3% for low-income borrowers. Applicants generally need a credit score of at least 620; pricing may be better for credit scores of 680 and above. Like the Freddie Mac program, HomeReady loans allow flexibility for down payment financing, such as gifts and grants.
For income limits, a comparison to an FHA loan, and other information, go to this Fannie Mae site .
Fannie Mae Standard 97 LTV Loan
The conventional 97 LTV loan is for first-time homebuyers of any income level who have a credit score of at least 620 and meet debt-to-income criteria. The 97% loan-to-value mortgage requires 3% down. Borrowers can get down payment and closing cost assistance from third-party sources.
Department of Veterans Affairs (VA) Loans
Eligible active-duty members of the military, veterans, reservists, and surviving spouses may apply for loans backed by the Department of Veterans Affairs. VA loans, which can be used to buy, build, or improve homes, have lower interest rates than most other mortgages and don’t require a down payment. Most borrowers pay a one-time funding fee that can be rolled into the mortgage.
Another benefit of VA loans is that they do not require private mortgage insurance (PMI) for borrowers who make a down payment of less than 20%. And they have more flexible credit score requirements. In some cases, even those who have previously been in foreclosure or bankruptcy can qualify.
Borrowers applying for a VA loan will need a Certificate of Eligibility from the VA so make sure to review a guide to qualifying for a VA loan as a first step in the process.
💡 Quick Tip: A VA loan can make home buying simple for qualified borrowers. Because the VA guarantees a portion of the loan, you could skip a down payment. Plus, you could qualify for lower interest rates, enjoy lower closing costs, and even bypass mortgage insurance.†
Native American Veteran Direct Loans (NADLs)
Eligible Native American veterans and their spouses may use these no-down-payment loans to buy, improve, or build a home on federal trust land. Unlike VA loans listed above, the Department of Veterans Affairs is the mortgage lender on NADLs. The VA requires no mortgage insurance, but it does charge a funding fee. You can learn more by emailing [email protected].
US Department of Agriculture (USDA) Loans
No down payment is required on these loans to moderate-income borrowers that are guaranteed by the USDA in specified rural areas. Borrowers pay an upfront guarantee fee and an annual fee that serves as mortgage insurance.
The USDA also directly issues loans to people with low- and very low-incomes. For loan basics and income and property eligibility, head to this USDA site .
HUD Good Neighbor Next Door Program
This program helps police officers, firefighters, EMTs, and teachers qualify for mortgages in the areas they serve. Borrowers can receive 50% off a home in what HUD calls a “revitalization area.” They must live in the home for at least three years.
For more information, visit the HUD program page.
Florida First-Time Homebuyer Stats for 2024
Here’s a snapshot of Florida homebuyers:
• Average home value: $389,400
• 3% down payment: $11,682
• 20% down payment: $77,880
• Average credit score: 707 (vs. 715 nationwide)
Financing Tips for First-Time Homebuyers
In addition to federal and state government-sponsored lending programs, there are other financial strategies that may help you become a homeowner. Some examples:
• Traditional IRA withdrawals. The IRS allows qualifying first-time homebuyers a one-time, penalty-free withdrawal of up to $10,000 from their IRA if the money is used to buy, build, or rebuild a home. The IRS considers anyone who has not owned a primary residence in the past two years a first-time homebuyer. You will still owe income tax on the IRA withdrawal. If you’re married and your spouse has an IRA, they may also make a penalty-free withdrawal of $10,000 to purchase a home. The downside, of course, is that large withdrawals may jeopardize your retirement savings.
• Roth IRA withdrawals. Because Roth IRA contributions are made with after-tax money, the IRS allows tax- and penalty-free withdrawals of contributions for any reason as long as you’ve held the account for five years. You may also withdraw up to $10,000 in earnings from your Roth IRA without paying taxes or penalties if you are a qualifying first-time homebuyer and you have had the account for five years. With accounts held for less than five years, homebuyers will pay income tax on earnings withdrawn.
• 401(k) loans. If your employer allows borrowing from the 401(k) plan that it sponsors, you may consider taking a loan against the 401(k) account to help finance your home purchase. With most plans, you can borrow up to 50% of your 401(k) balance, up to $50,000 in a 12-month period, without incurring taxes or penalties. You pay interest on the loan, which is paid into your 401(k) account. You usually have to pay back the loan within five years, but if you’re using the money to buy a house, you may have longer to repay.
• State and local down payment assistance programs. Usually offered at the regional or county level, these programs provide flexible second mortgages for first-time buyers looking into how to afford a down payment.
• Your employer. Your employer may offer access to lower-cost lenders and real estate agents in your area, as well as home buying education courses.
• Your lender. Always ask your lender about any first-time homebuyer grant or down payment assistance programs available from government, nonprofit, and community organizations in your area.
Recommended: Six Simple Ways to Reduce a Mortgage Payment
The Takeaway
Some first-time homebuyers in the Sunshine State will qualify for assistance from Florida Housing. These programs can help lower costs of a down payment, mortgage, and closing costs. Other Florida buyers may want to turn to government-backed or conventional loans on their own.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.
FAQ
Should I take first-time homebuyer classes?
Yes, this information can help newcomers have a successful home-buying experience. Indeed, these classes are required for most government-sponsored loan programs.
Do first-time homebuyers with bad credit qualify for homeownership assistance?
Many government and nonprofit homeowner assistance programs are available to people with low credit scores. That said, almost any lending program has credit qualifications.
Is there a first-time veteran homebuyer assistance program in Florida?
Yes. The new Hometown Heroes Housing Program provides reduced-rate first mortgages and 0% interest deferred second mortgages for a down payment or closing costs. Military members and vets need not be first-time buyers. Florida veterans may also may find options in the federal Department of Veterans Affairs and Native American Veteran Direct Loan programs listed above.
What credit score do I need for first-time homebuyer assistance in Florida?
Programs administered by the Florida Housing Finance Corporation require a credit score of 640.
What is the average age of first-time homebuyers in Florida?
While the average age of first-time homebuyers in Florida can be hard to find, the average age nationally is 38.
Photo credit: iStock/benedek
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Qualifying for the reward requires using a real estate agent that participates in HomeStory’s broker to broker agreement to complete the real estate buy and/or sell transaction. You retain the right to negotiate buyer and or seller representation agreements. Upon successful close of the transaction, the Real Estate Agent pays a fee to HomeStory Real Estate Services. All Agents have been independently vetted by HomeStory to meet performance expectations required to participate in the program. If you are currently working with a REALTOR®, please disregard this notice. It is not our intention to solicit the offerings of other REALTORS®. A reward is not available where prohibited by state law, including Alaska, Iowa, Louisiana and Missouri. A reduced agent commission may be available for sellers in lieu of the reward in Mississippi, New Jersey, Oklahoma, and Oregon and should be discussed with the agent upon enrollment. No reward will be available for buyers in Mississippi, Oklahoma, and Oregon. A commission credit may be available for buyers in lieu of the reward in New Jersey and must be discussed with the agent upon enrollment and included in a Buyer Agency Agreement with Rebate Provision. Rewards in Kansas and Tennessee are required to be delivered by gift card.
HomeStory will issue the reward using the payment option you select and will be sent to the client enrolled in the program within 45 days of HomeStory Real Estate Services receipt of settlement statements and any other documentation reasonably required to calculate the applicable reward amount. Real estate agent fees and commissions still apply. Short sale transactions do not qualify for the reward. Depending on state regulations highlighted above, reward amount is based on sale price of the home purchased and/or sold and cannot exceed $9,500 per buy or sell transaction. Employer-sponsored relocations may preclude participation in the reward program offering. SoFi is not responsible for the reward.
SoFi Bank, N.A. (NMLS #696891) does not perform any activity that is or could be construed as unlicensed real estate activity, and SoFi is not licensed as a real estate broker. Agents of SoFi are not authorized to perform real estate activity.
If your property is currently listed with a REALTOR®, please disregard this notice. It is not our intention to solicit the offerings of other REALTORS®.
Reward is valid for 18 months from date of enrollment. After 18 months, you must re-enroll to be eligible for a reward.
SoFi loans subject to credit approval. Offer subject to change or cancellation without notice.
The trademarks, logos and names of other companies, products and services are the property of their respective owners.
SOHL-Q225-216
Massachusetts First-Time Home Buying Assistance Programs & Grants for 2025
Massachusetts First-Time Home-Buying Assistance Programs & Grants
(Last Updated – 06/2025)
Glorious New England scenery, a rich history, and diverse cultural and educational opportunities are just some of the things Massachusetts has to offer residents. No surprise, then, that home prices here outpace the national average, or that they are rising. The median home sale price in Massachusetts was up 3.8% year-over-year as of April 2025, according to Redfin, a real estate brokerage company that analyzes housing market data across the country. The median sale price in the state is now $658,600.
At the same time, the median number of days a home stays on the market has remained relatively steady at 21, up just one day year-over-year.
Massachusetts may be pricey, but there are plenty of opportunities for the first-time homebuyer here, including state and federal programs that offer low-interest mortgage loans and assistance with down payment and closing costs to those who qualify. Here’s what you need to know.
Who Is Considered a First-Time Homebuyer in Massachusetts?
The definition is broader than you might realize. In addition to someone who has never owned a home, you are considered a first-time homebuyer if you haven’t owned a house in the last three years.
According to the U.S. Department of Housing and Urban Development (HUD), you can also qualify as a first-time homebuyer when seeking a home mortgage loan if you are a single parent who has only owned a home with a partner while married, or a displaced homemaker who has only owned a home with a spouse.
Many of the state programs that help first-time buyers with mortgage loans and down payment assistance require you to take a homebuyer education course. This can help you learn the mortgage basics. Looking to live in the Bay State but not sure where to settle? Check out a list of the best affordable places to live in Massachusetts.
Recommended: First-Time Homebuyer Guide
3 Massachusetts Programs for First-Time Homebuyers
There are several types of mortgage loans you may qualify for as a first time homebuyer in Massachusetts. Each has certain criteria, including income and purchase price limits.
1. My Mass Mortgage: ONE Mortgage
This program offers 30-year fixed interest rate loans to low- and moderate-income first-time homebuyers in Massachusetts. You can pay either 3% or 5% as a down payment, depending on the type of home you’re buying. No private mortgage Insurance is required.
To be eligible, you must meet asset and income limits, make the required down payment, be a first-time homebuyer, and meet credit and underwriting requirements. The home you are buying must be your primary residence through the life of the loan, and you need to complete a homebuyer education program.
2. My Mass Mortgage: MassHousing Mortgage
MassHousing Loan provides low-interest fixed rate loans and mortgage payment protection. To qualify, you must meet income guidelines, have good credit, and complete a homebuyer education course.
3. MassHousing: Down Payment Assistance
With a MassHousing Mortgage, you can get up to $30,000 to cover your down payment (the amount depends on which community you live in) . The assistance provides up to 10% of your home’s purchase price.
As you’re exploring your options, you can use a mortgage calculator to see what your monthly payments would be.
How to Apply to Massachusetts Programs for First-Time Homebuyers
The easiest way for the first-time homebuyer in Massachusetts to get started, is to contact a participating lender . They’ll review your situation and show you the best options for buying a home.
Not sure how much you should spend on a house? This home affordability calculator can help.
Federal Programs for First-Time Homebuyers
Several federal government programs are designed for people who have low credit scores or limited cash for a down payment. Although most of these programs are available to repeat homeowners, like state programs, they can be especially helpful to people who are buying a first home or who haven’t owned a home in several years.
The mortgages are generally for single-family homes, two- to four-unit properties that will be owner occupied, approved condos, townhomes, planned unit developments, and some manufactured homes.
Federal Housing Administration (FHA) Loans
The FHA, which is part of the U.S. Department of Housing and Urban Development (HUD), insures mortgages for borrowers with lower credit scores. Homebuyers choose from a list of approved lenders that participate in the FHA loan program. Loans have competitive interest rates and require a down payment of 3.5% of the purchase price for borrowers, who typically need FICO® credit scores of 580 or higher. Those with scores as low as 500 must put at least 10% down.
In addition to examining your credit score, lenders will look at your debt-to-income ratio (DTI, your monthly debt payments divided by your monthly gross income). FHA loans allow a DTI ratio of up to 57% in some cases, vs. a typical 45% maximum for a conventional loan.
Gift money for the down payment is allowed from certain donors and will be documented in a gift letter for the mortgage.
FHA loans always require mortgage insurance: a 1.75% upfront fee and annual premiums for the life of the loan, unless you make a down payment of at least 10%, which allows the removal of mortgage insurance after 11 years. For a $300,000 mortgage balance, upfront MIP would be around $5,250 and monthly MIP, at a rate of 0.55%, would be around $137. You can learn more about these loans, including FHA loans for refinance and rehab of properties, by reading up on FHA requirements, loan limits, and rates.
Freddie Mac Home Possible Mortgages
Very low- and low-income borrowers may make a 3% down payment on a Home Possible® mortgage. These loans allow various sources for down payments, including co-borrowers, family gifts, employer assistance, secondary financing, and sweat equity.
The Home Possible mortgage is for buyers who have a credit score of at least 660.
Once you pay 20% of your loan, the Home Possible mortgage insurance will be canceled, which will lower your mortgage payments.
Fannie Mae HomeReady Mortgages
Fannie Mae HomeReady® Mortgages allow down payments as low as 3% for low-income borrowers. Applicants generally need a credit score of at least 620; pricing may be better for credit scores of 680 and above. Like the Freddie Mac program, HomeReady loans allow flexibility for down payment financing, such as gifts and grants.
For income limits, a comparison to an FHA loan, and other information, go to this Fannie Mae site .
Fannie Mae Standard 97 LTV Loan
The conventional 97 LTV loan is for first-time homebuyers of any income level who have a credit score of at least 620 and meet debt-to-income criteria. The 97% loan-to-value mortgage requires 3% down. Borrowers can get down payment and closing cost assistance from third-party sources.
Unlike an FHA loan, the 97 LTV loan has no upfront mortgage insurance fee and does have cancellable mortgage insurance. The loan is for just one-unit single-family homes, co-ops, condos, and planned unit developments.
Department of Veterans Affairs (VA) Loans
Eligible active-duty members of the military, veterans, reservists, and surviving spouses may apply for loans backed by the Department of Veterans Affairs. VA loans, which can be used to buy, build, or improve homes, have lower interest rates than most other mortgages and don’t require a down payment. Most borrowers pay a one-time funding fee that can be rolled into the mortgage.
Another benefit of VA loans is that they do not require private mortgage insurance (PMI) for borrowers who make a down payment of less than 20%. And they have more flexible credit score requirements. In some cases, even those who have previously been in foreclosure or bankruptcy can qualify.
Borrowers applying for a VA loan will need a Certificate of Eligibility from the VA so make sure to review a guide to qualifying for a VA loan as a first step in the process.
Native American Veteran Direct Loans (NADLs)
Eligible Native American veterans and their spouses may use these no-down-payment loans to buy, improve, or build a home on federal trust land. Unlike VA loans listed above, the Department of Veterans Affairs is the mortgage lender on NADLs. The VA requires no mortgage insurance, but it does charge a funding fee.
Regional loan centers are closed to the public, but for more information you can email [email protected]
US Department of Agriculture (USDA) Loans
No down payment is required on these loans to moderate-income borrowers that are guaranteed by the USDA in specified rural areas. Borrowers pay an upfront guarantee fee and an annual fee that serves as mortgage insurance.
The USDA also directly issues loans to low- and very low-income people. For loan basics and income and property eligibility, head to this USDA site .
HUD Good Neighbor Next Door Program
This program helps police officers, firefighters, emergency medical technicians, and teachers of students in pre-K through 12th grade qualify for mortgages in the areas they serve. Borrowers can receive 50% off a home in what HUD calls a “revitalization area.” They must live in the home for at least three years.
Massachusetts Homebuyer Stats for 2025
Here’s some data about Massachusetts home sales.
• Median home sale price in Massachusetts: $658,600
• Number of homes for sale: 18,185
• Percentage of buyers nationwide who are first-time buyers: 24%
• Median age of first-time homebuyers: 38
Financing Tips for First-Time Homebuyers
In addition to federal and state government-sponsored lending programs, there are other financial strategies that may help you become a homeowner. After reading up on how to choose a mortgage term, check out these tips on how to lower your mortgage payment:
• Traditional IRA withdrawals. The IRS allows qualifying first-time homebuyers a one-time, penalty-free withdrawal of up to $10,000 from their IRA if the money is used to buy, build, or rebuild a home. When it comes to IRA withdrawals, the IRS considers anyone who has not owned a primary residence in the past two years a first-time homebuyer. You will still owe income tax on the IRA withdrawal. If you’re married and your spouse has an IRA, they may also make a penalty-free withdrawal of $10,000 to purchase a home. The downside, of course, is that large withdrawals may jeopardize your retirement savings.
• Roth IRA withdrawals. Because Roth IRA contributions are made with after-tax money, the IRS allows tax- and penalty-free withdrawals of contributions for any reason as long as you’ve held the account for five years. You may also withdraw up to $10,000 in earnings from your Roth IRA without paying taxes or penalties if you are a qualifying first-time homebuyer and you have had the account for five years. With accounts held for less than five years, homebuyers will pay income tax on earnings withdrawn.
• 401(k) loans. If your employer allows borrowing from the 401(k) plan that it sponsors, you may consider taking a loan against the 401(k) account to help finance your home purchase. With most plans, you can borrow up to 50% of your 401(k) balance, up to $50,000, within a 12-month period without incurring taxes or penalties. You pay interest on the loan, which is paid into your 401(k) account. You usually have to pay back the loan within five years, but if you’re using the money to buy a house, you may have up to 15 years to repay.
• State and local down payment assistance programs. Usually offered at the regional or county level, these programs provide flexible second mortgages for first-time buyers looking into how to afford a down payment.
• The mortgage credit certificate program. First-time homeowners and those who buy in targeted areas can claim a portion of their mortgage interest as a tax credit, up to $2,000. Any additional interest paid can still be used as an itemized deduction. To qualify for the credit, you must be a first-time homebuyer, live in the home, and meet income and purchase price requirements, which vary by state. If you refinance, the credit disappears, and if you sell the house before nine years, you may have to pay some of the tax credit back. There are fees associated with applying for and receiving the mortgage credit certificate that vary by state. Often the savings from the lifetime of the credit can outweigh these fees.
• Your employer. Your employer may offer access to lower-cost lenders and real estate agents in your area, as well as home buying education courses.
• Your lender. Always ask your lender about any first-time homebuyer grant or down payment assistance programs available from government, nonprofit, and community organizations in your area.
The Takeaway
Massachusetts has programs that can help qualified first-time homebuyers get a low-interest mortgage or assistance with the down payment and closing costs. There are also federal-government-backed and conventional loans buyers can consider.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.
FAQ
Should I take first-time homebuyer classes?
It’s a good idea to take a class to learn about technical aspects of the homebuying process and simplify the process of applying for a mortgage and purchasing a home. Indeed classes are required for some government-sponsored loan programs.
Do first-time homebuyers with bad credit qualify for homeownership assistance?
Often they do. Many government and nonprofit homeowner assistance programs are available to people with low credit scores. And often, interest rates and other loan pricing are competitive with those of loans available to borrowers with higher credit scores. That said, almost any lending program has credit qualifications. That’s why it’s important to take all possible steps to improve your credit standing before you go house hunting.
Is there a first-time homebuyer tax credit in Massachusetts?
Not currently. Homeowners can, however, claim a tax credit for lead abatement, repair of a failed septic system, or installation of certain renewable energy features.
Is there a first-time veteran homebuyer assistance program in Massachusetts?
Yes. The U.S. Department of Veterans Affairs offers home loans to eligible servicemembers, veterans, reservists, and surviving spouses.
What credit score do I need for first-time homebuyer assistance in Massachusetts?
It varies by program. For example, the Freddie Mac Home Possible Mortgage requires a credit score of 660.
What is the average age of first-time homebuyers in Massachusetts?
In the U.S., the median age of first-time homebuyers was 38 as of late 2024, an all-time high.
Photo credit: iStock/sphraner
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Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
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¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Qualifying for the reward requires using a real estate agent that participates in HomeStory’s broker to broker agreement to complete the real estate buy and/or sell transaction. You retain the right to negotiate buyer and or seller representation agreements. Upon successful close of the transaction, the Real Estate Agent pays a fee to HomeStory Real Estate Services. All Agents have been independently vetted by HomeStory to meet performance expectations required to participate in the program. If you are currently working with a REALTOR®, please disregard this notice. It is not our intention to solicit the offerings of other REALTORS®. A reward is not available where prohibited by state law, including Alaska, Iowa, Louisiana and Missouri. A reduced agent commission may be available for sellers in lieu of the reward in Mississippi, New Jersey, Oklahoma, and Oregon and should be discussed with the agent upon enrollment. No reward will be available for buyers in Mississippi, Oklahoma, and Oregon. A commission credit may be available for buyers in lieu of the reward in New Jersey and must be discussed with the agent upon enrollment and included in a Buyer Agency Agreement with Rebate Provision. Rewards in Kansas and Tennessee are required to be delivered by gift card.
HomeStory will issue the reward using the payment option you select and will be sent to the client enrolled in the program within 45 days of HomeStory Real Estate Services receipt of settlement statements and any other documentation reasonably required to calculate the applicable reward amount. Real estate agent fees and commissions still apply. Short sale transactions do not qualify for the reward. Depending on state regulations highlighted above, reward amount is based on sale price of the home purchased and/or sold and cannot exceed $9,500 per buy or sell transaction. Employer-sponsored relocations may preclude participation in the reward program offering. SoFi is not responsible for the reward.
SoFi Bank, N.A. (NMLS #696891) does not perform any activity that is or could be construed as unlicensed real estate activity, and SoFi is not licensed as a real estate broker. Agents of SoFi are not authorized to perform real estate activity.
If your property is currently listed with a REALTOR®, please disregard this notice. It is not our intention to solicit the offerings of other REALTORS®.
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Connecticut First-Time Home Buying Assistance Programs & Grants for 2025
Connecticut First-Time Home-Buying Assistance Programs & Grants
(Last Updated – 06/2025)
Are you a first-time homebuyer in Connecticut? You’re looking at a tough market in the Constitution State. In April 2025, home prices in Connecticut were up 7.6% year-over-year. The median price of a Nutmeg State home is $451,100, according to Redfin. This home-buying guide was crafted to help first-time homebuyers. But hey, that raises a question…
Who Is Considered a First-Time Homebuyer in Connecticut?
A first-time homebuyer is someone who has either never owned a home or hasn’t owned one in the past three years.
At the national level, the U.S. Department of Housing and Urban Development (HUD) definition includes:
• A single parent who has only owned a home with a partner while married
• A displaced homemaker who has only owned a home with a spouse
• Someone who has owned a principal residence not permanently affixed to a permanent foundation
• Someone who has only owned a property that wasn’t in compliance with state, local, or model building codes and that would cost more to fix than building a new home
Veterans and people who buy in targeted areas often qualify for the same state and county home mortgage loan perks that first-time buyers do. If you aren’t sure what area you want to live in just yet, check out a list of the best affordable cities in Connecticut.
Recommended: First-Time Homebuyer Guide
7 Connecticut Programs for First-Time Homebuyers
The Connecticut Housing Finance Authority leads the way in offering mortgages and down payment assistance to low- and moderate-income buyers.
Here are the programs.
1. Homebuyer Mortgage Program
Connecticut Housing Finance Authority mortgages with below-market interest rates can be paired with down payment assistance for those who qualify. Borrowers must be first-time homebuyers or purchasing in a targeted area. There are home price and income limits .
Borrowers must attend a free homebuyer education course, which will explain the home-buying process and mortgage basics.
2. HFA Advantage and HFA Preferred Loan Programs
This program for first-time buyers and people purchasing in a targeted area provides mortgage loans with lower monthly mortgage insurance costs. And mortgage insurance premiums end when the borrower reaches 20% equity.
You must meet sale price and income limits (see this chart).
3. Military, Teacher, and Police Homeownership Programs
Connecticut Housing offers benefits to active-duty military members, veterans, and surviving spouses who meet purchase price and income limits. The agency has a similar program for teachers and police officers .
Another mortgage and down payment program is for applicants who are disabled or who have a disabled member of the household.
4. Down Payment Assistance Program Loan
This very low-rate second mortgage program provides a loan of up to $15,000 at an attractive rate to help with a down payment or closing costs.
Borrowers must apply and qualify for a Connecticut Housing mortgage with a participating lender and demonstrate the ability to repay that mortgage and the second loan to qualify.
5. Time to Own: Forgivable Down Payment Assistance
This program provides 0.00% interest loans with no monthly payment required. Each year, 10% of the balance will be forgiven until the loan is fully forgiven in 10 years. The loan amounts are as follows:
• Homes in high- or very high-opportunity areas : up to $50,000
• Homes in other areas: up to $25,000
Borrowers must qualify and receive a Connecticut Housing mortgage, and must have been a resident of Connecticut for at least the preceding three years.
The Time to Own loan may be used with other down payment assistance programs.
6. Another Down Payment Assistance Program
The Housing Development Fund (HDF) offers down payment assistance to qualified first-time homebuyers (the applicant and any non-borrowing spouse must be first-time buyers). With the CT Forever program, first-time homebuyers can borrow up to $28,000 in down payment assistance at 1.00%. (If they sell within 10 years of purchase, the price must be affordable to homebuyers.) The Live Where You Work program offers first-time homebuyers up to $25,000 in down payment and closing cost assistance at 0.00% interest if they are buying a home in the town where they work. The SmartMove Homeownership second mortgage charges 3.00% on a loan for up to 25% of the home’s purchase price to help with down payment and qualified closing costs.
To be eligible, you must have not had a bankruptcy in the past four years or a foreclosure in the past seven years. You must have funds available to cover at least 1% of the purchase price, pre-closing costs, and emergency reserves, and be able to demonstrate a steady work history and on-time bill payment.
7. City Programs in Connecticut
Some cities also offer homeownership help. You might want to look into your city of choice and consult the list compiled by the CHFA.
How to Apply to Connecticut Programs for First-Time Homebuyers
To apply for a mortgage offered by the Connecticut Housing Finance Authority, contact one or more participating lenders .
To apply for Housing Development Fund down payment assistance, create an account and upload documents.
Do you know how much you can afford to pay for a house? This home affordability calculator could help.
Federal Programs for First-Time Homebuyers
Several federal government programs are designed for people who have low credit scores or limited cash for a down payment. Although most of these programs are available to repeat homeowners, like state programs, they can be especially helpful to people who are buying a first home or who haven’t owned a home in several years.
The mortgages are generally for single-family homes, two- to four-unit properties that will be owner occupied, approved condos, townhomes, planned unit developments, and some manufactured homes.
Federal Housing Administration (FHA) Loans
The FHA, which is part of the U.S. Department of Housing and Urban Development (HUD), insures mortgages for borrowers with lower credit scores. Homebuyers choose from a list of approved lenders that participate in the FHA loan program. Loans have competitive interest rates and require a down payment of 3.5% of the purchase price for borrowers, who typically need FICO® credit scores of 580 or higher. Those with scores as low as 500 must put at least 10% down.
In addition to examining your credit score, lenders will look at your debt-to-income ratio (DTI, your monthly debt payments compared with your monthly gross income). FHA loans allow a DTI ratio of up to 57% in some cases, vs. a typical 45% maximum for a conventional loan.
Gift money for the down payment is allowed from certain donors and will be documented in a gift letter for the mortgage.
FHA loans always require mortgage insurance: a 1.75% upfront fee and annual premiums for the life of the loan, unless you make a down payment of at least 10%, which allows the removal of mortgage insurance after 11 years. For a $300,000 mortgage balance, upfront MIP would be around $5,250 and monthly MIP, at a rate of 0.55%, would be around $137. You can learn more about these loans, including FHA loans for refinance and rehab of properties, by reading up on FHA requirements, loan limits, and rates.
Freddie Mac Home Possible Mortgages
Very low- and low-income borrowers may make a 3% down payment on a Home Possible® mortgage. These loans allow various sources for down payments, including co-borrowers, family gifts, employer assistance, secondary financing, and sweat equity.
The Home Possible mortgage is for buyers who have a credit score of at least 660.
Once you pay 20% of your loan, the Home Possible mortgage insurance will be canceled, which will lower your mortgage payments.
Fannie Mae HomeReady Mortgages
Fannie Mae HomeReady® Mortgages allow down payments as low as 3% for low-income borrowers. Applicants generally need a credit score of at least 620; pricing may be better for credit scores of 680 and above. Like the Freddie Mac program, HomeReady loans allow flexibility for down payment financing, such as gifts and grants.
For income limits, a comparison to an FHA loan, and other information, go to this Fannie Mae site .
Fannie Mae Standard 97 LTV Loan
The conventional 97 LTV loan is for first-time homebuyers of any income level who have a credit score of at least 620 and meet debt-to-income criteria. The 97% loan-to-value mortgage requires 3% down. Borrowers can get down payment and closing cost assistance from third-party sources.
Department of Veterans Affairs (VA) Loans
Eligible active-duty members of the military, veterans, reservists, and surviving spouses may apply for loans backed by the Department of Veterans Affairs. VA loans, which can be used to buy, build, or improve homes, have lower interest rates than most other mortgages and don’t require a down payment. Most borrowers pay a one-time funding fee that can be rolled into the mortgage.
Another benefit of VA loans is that they do not require private mortgage insurance (PMI) for borrowers who make a down payment of less than 20%. And they have more flexible credit score requirements. In some cases, even those who have previously been in foreclosure or bankruptcy can qualify.
Borrowers applying for a VA loan will need a Certificate of Eligibility from the VA so make sure to review a guide to qualifying for a VA loan as a first step in the process.
Native American Veteran Direct Loans (NADLs)
Eligible Native American veterans and their spouses may use these no-down-payment loans to buy, improve, or build a home on federal trust land. Unlike VA loans listed above, the Department of Veterans Affairs is the mortgage lender on NADLs. The VA requires no mortgage insurance, but it does charge a funding fee.
US Department of Agriculture (USDA) Loans
No down payment is required on these loans to moderate-income borrowers that are guaranteed by the USDA in specified rural areas. Borrowers pay an upfront guarantee fee and an annual fee that serves as mortgage insurance.
The USDA also directly issues loans to low- and very low-income people. For loan basics and income and property eligibility, head to this USDA site .
HUD Good Neighbor Next Door Program
This program helps police officers, firefighters, emergency medical technicians, and teachers qualify for mortgages in the areas they serve. Borrowers can receive 50% off a home in what HUD calls a “revitalization area.” They must live in the home for at least three years. For more information, visit the HUD program page.
First-Time Homebuyer Stats for 2024
• Median home sale price in Connecticut: $451,500
• 3% down payment: $13,545
• 20% down payment: $90,300
• Percentage of buyers nationwide who are first-time buyers: 24%
• Median age of first-time homebuyers: 38
• Average credit score (vs. average U.S. score of 715): 726
Financing Tips for First-Time Homebuyers
In addition to federal and state government-sponsored lending programs, there are other financial strategies that may help you become a homeowner. Some examples:
• Traditional IRA withdrawals. The IRS allows qualifying first-time homebuyers a one-time, penalty-free withdrawal of up to $10,000 from their IRA if the money is used to buy, build, or rebuild a home. The IRS considers anyone who has not owned a primary residence in the past two years a first-time homebuyer. You will still owe income tax on the IRA withdrawal. If you’re married and your spouse has an IRA, they may also make a penalty-free withdrawal of $10,000 to purchase a home. The downside, of course, is that large withdrawals may jeopardize your retirement savings.
• Roth IRA withdrawals. Because Roth IRA contributions are made with after-tax money, the IRS allows tax- and penalty-free withdrawals of contributions for any reason as long as you’ve held the account for five years. You may also withdraw up to $10,000 in earnings from your Roth IRA without paying taxes or penalties if you are a qualifying first-time homebuyer and you have had the account for five years. With accounts held for less than five years, homebuyers will pay income tax on earnings withdrawn.
• 401(k) loans. If your employer allows borrowing from the 401(k) plan that it sponsors, you may consider taking a loan against the 401(k) account to help finance your home purchase. With most plans, you can borrow up to 50% of your 401(k) balance, up to $50,000, in a year without incurring taxes or penalties. You pay interest on the loan, which is paid into your 401(k) account. You usually have to pay back the loan within five years, but if you’re using the money to buy a house, you may have longer to repay.
• State and local down payment assistance programs. Usually offered at the regional or county level, these programs provide flexible second mortgages for first-time buyers looking into how to afford a down payment.
• The mortgage credit certificate program. First-time homeowners and those who buy in targeted areas can claim a portion of their mortgage interest as a tax credit, up to $2,000. Any additional interest paid can still be used as an itemized deduction. To qualify for the credit, you must be a first-time homebuyer, live in the home, and meet income and purchase price requirements, which vary by state. If you refinance, the credit disappears, and if you sell the house before nine years, you may have to pay some of the tax credit back. There are fees associated with applying for and receiving the mortgage credit certificate that vary by state. Often the savings from the lifetime of the credit can outweigh these fees.
• Your employer. Your employer may offer access to lower-cost lenders and real estate agents in your area, as well as home buying education courses.
• Your lender. Always ask your lender about any first-time homebuyer grant or down payment assistance programs available from government, nonprofit, and community organizations in your area.
Finally, this home affordability calculator can show you how much you can afford to spend on a home.
The Takeaway
First-time homebuyers in Connecticut may be able to take advantage of attractive home loan and down payment assistance options. Those who don’t fit within the parameters may be able to find good mortgage opportunities on their own.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.
FAQ
Should I take first-time homebuyer classes?
Yes! Newcomers can easily be overwhelmed by the jargon, technicalities, and magnitude of applying for a mortgage and purchasing a home. First-time homebuyer classes can help. Indeed, they are required for some government-sponsored loan programs.
Do first-time homebuyers with bad credit qualify for homeownership assistance?
Often they do. Many government and nonprofit homeowner assistance programs are available to people with low credit scores. And often, interest rates and other loan pricing are competitive with those of loans available to borrowers with higher credit scores. That said, almost any lending program has credit qualifications.
Is there a first-time homebuyer tax credit in Connecticut?
The Connecticut Housing Finance Authority does not offer one. Homebuyers should check with their lender or tax advisor as tax policies change periodically.
Is there a first-time veteran homebuyer assistance program in Connecticut?
Yes. Connecticut Housing has a veterans program that offers a below-market-rate mortgage that can be paired with down payment assistance for those who qualify.
What credit score do I need for first-time homebuyer assistance in Connecticut?
The assistance programs described specify no minimum credit scores. Lenders often determine their own minimum scores.
What is the average age of first-time homebuyers in Connecticut?
The U.S. median age of first-time homebuyers is 38.
Photo credit: iStock/DenisTangneyJr
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
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Qualifying for the reward requires using a real estate agent that participates in HomeStory’s broker to broker agreement to complete the real estate buy and/or sell transaction. You retain the right to negotiate buyer and or seller representation agreements. Upon successful close of the transaction, the Real Estate Agent pays a fee to HomeStory Real Estate Services. All Agents have been independently vetted by HomeStory to meet performance expectations required to participate in the program. If you are currently working with a REALTOR®, please disregard this notice. It is not our intention to solicit the offerings of other REALTORS®. A reward is not available where prohibited by state law, including Alaska, Iowa, Louisiana and Missouri. A reduced agent commission may be available for sellers in lieu of the reward in Mississippi, New Jersey, Oklahoma, and Oregon and should be discussed with the agent upon enrollment. No reward will be available for buyers in Mississippi, Oklahoma, and Oregon. A commission credit may be available for buyers in lieu of the reward in New Jersey and must be discussed with the agent upon enrollment and included in a Buyer Agency Agreement with Rebate Provision. Rewards in Kansas and Tennessee are required to be delivered by gift card.
HomeStory will issue the reward using the payment option you select and will be sent to the client enrolled in the program within 45 days of HomeStory Real Estate Services receipt of settlement statements and any other documentation reasonably required to calculate the applicable reward amount. Real estate agent fees and commissions still apply. Short sale transactions do not qualify for the reward. Depending on state regulations highlighted above, reward amount is based on sale price of the home purchased and/or sold and cannot exceed $9,500 per buy or sell transaction. Employer-sponsored relocations may preclude participation in the reward program offering. SoFi is not responsible for the reward.
SoFi Bank, N.A. (NMLS #696891) does not perform any activity that is or could be construed as unlicensed real estate activity, and SoFi is not licensed as a real estate broker. Agents of SoFi are not authorized to perform real estate activity.
If your property is currently listed with a REALTOR®, please disregard this notice. It is not our intention to solicit the offerings of other REALTORS®.
Reward is valid for 18 months from date of enrollment. After 18 months, you must re-enroll to be eligible for a reward.
SoFi loans subject to credit approval. Offer subject to change or cancellation without notice.
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