New Mexico First-Time Home Buying Assistance Programs & Grants
New Mexico First-Time Home-Buying Assistance Programs & Grants
(Last Updated – 06/2025)
From the mountains in the north and east to the deserts of the south and west, New Mexico offers one-of-kind natural beauty for potential homeowners. But as a first-time homebuyer, you may find it challenging to afford this state. The average home value is $314,299 as of April 2025 versus the national average of $367,711, according to Zillow, but prices have risen 2.8% year over year. And if you want to live in a hot market like Santa Fe, you’ll find average home values of $590,132.
Still, first-time buyers with low to moderate incomes may be able to get a toehold in the market with state assistance. Others may find a government-insured or conventional loan on their own. Here, you’ll learn about these programs that can help with down payment, mortgage, and closing costs.
Who Is Considered a First-Time Homebuyer in New Mexico?
The New Mexico Mortgage Finance Authority and the federal government consider anyone who has not owned a principal home in the past three years a first-time buyer.
The state agency requires all buyers to complete a homebuyer education course before the purchase. Homebuyer education classes can help buyers understand how much home they can afford.
💡 Quick Tip: Want the comforts of home and to feel comfortable with your home loan? SoFi has a simple online application and a team dedicated to closing your loan on time. No surprise SoFi has been named a Top Online Lender in 2024 by LendingTree/Newsweek.
4 New Mexico Programs for First-Time Homebuyers
The New Mexico Mortgage Finance Authority, also known as the MFA, administers several types of home loans through its FirstHOME Program. The agency also offers a down payment assistance program. Here are the details..
1. MFA FirstHOME Loan
The MFA FirstHOME Loan program for first-time buyers offers an FHA, VA, USDA, or housing finance agency preferred conventional loan. It can be paired with New Mexico’s down payment assistance program.
Borrowers must have a minimum credit score of 620 (for buyers with no credit score, alternative credit qualification may be acceptable).
There are household income and purchase price limits unless the buyer is planning to purchase a home in a targeted area. Residences that may be financed must be single-family homes, including manufactured homes that meet current agency or government guidelines for their loan type.
2. MFA FirstDown and FirstDown Plus Loan
This FirstDown Loan program provides a fixed-rate second mortgage loan for down payment and closing cost assistance for first-time homebuyers in New Mexico. FirstDown must be combined with the FirstHome program. The requirements are similar to FirstHome; borrowers must have a minimum credit score of 620 in most cases.
An additional helping hand may be available: FirstDown Plus provides a fixed amount of $15,000 in the form of a 10- year, non-amortizing loan with a 0% interest rate. The $15,000 must be used only for down payment, and it’s a loan, not a grant. The FirstDown Plus loan has no monthly payments and will be forgiven if the borrower continually occupies the home for a full 10-year period and follows the other loan guidelines.
3. MFA HomeNow Program
The New Mexico MFA another assistance program for first-time homeowners: The HomeNow down payment/closing cost assistance program offers a second mortgage with 0% interest and no payments and may be forgiven in 10 years for borrowers who still own and occupy their houses.
There are income limits based on household size, and buyers need a credit score of 620 and need to be utilizing a FirstHome mortgage. Purchase price limits also apply. Funding for this program is sometimes depleted but may also be renewed, so check the MFA site for the latest.
4. MFA HomeForward Program
HomeForward is another option for first-time homebuyers in New Mexico. A HomeForward First Mortgage Loan may be available to prospective borrowers who do not qualify for the FirstHome program. The HomeForward can be used with MFA’s HomeForward DPA program, a second mortgage that can cover up to 3% of the sale price. Again, a credit score of at least 620 is required.
Recommended: Understanding the Different Types of Mortgage Loans
How to Apply to New Mexico Programs for First-Time Homebuyers
The New Mexico Mortgage Finance Authority website contains more information and fact sheets on all of its first-time and repeat buyer mortgage programs and how they work with MFA’s down payment assistance.
The agency does not lend directly but does list participating lenders, making it easier to compare interest rates, fees, and other costs and learn what you qualify for.
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. Consider these details:
• 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.
• 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.
• 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
Are you an active-duty member of the military, veteran, reservist or surviving spouse? You may be eligible to apply for loans backed by the Department of Veterans Affairs. Here’s a quick look at what is a VA loan: They 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 receive more information on these loans by contacting [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.
New Mexico First-Time Homebuyer Stats for 2025
Here’s a snapshot of typical New Mexico home sales transactions.
• Median home sale price according to Redfin: $368,700
• 3% down payment: $11,061
• 20% down payment: $73,740
• Average credit score in New Mexico (vs. U.S. average of 715): 702
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. For accounts held for less than five years, homebuyers will have to 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 to 25 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.
• 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.
Worth noting: New Mexico currently does not offer the mortgage tax credit certificate program.
The Takeaway
New Mexico has a robust state program for first-time homebuyers purchasing in the Land of Enchantment. You may find suitable programs to help lower down payment, mortgage, and closing costs. In addition, first-time buyers can look into government-insured and conventional loans on their own to find a good fit.
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! Good information is key to a successful home-buying experience for anyone, but especially for newcomers. These classes can provide those insights, and, what’s more, the courses are required for many government-sponsored loan programs.
Do first-time homebuyers with bad credit qualify for homeownership assistance?
Often it is possible to get homebuying assistance even if you have poor credit. Many government and nonprofit homeowner assistance programs help 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 New Mexico?
No. New Mexico is not a state that offers the mortgage credit certificate program for first-time homebuyers.
Is there a first-time veteran homebuyer assistance program in New Mexico?
New Mexico’s first-time homeowner programs include VA loans, which typically require no down payment and no mortgage insurance but do charge a one-time fee that is a percentage of the loan. New Mexico veterans may also may find options in the federal VA loan program listed above.
What credit score do I need for first-time homebuyer assistance in New Mexico?
Programs administered by the New Mexico Mortgage Finance Authority require a credit score of 620 or above. For borrowers who have no credit score, alternative credit qualification is accepted in some cases. There are other private, state, and federal loan programs that borrowers with lower scores may be able to access.
What is the average age of first-time homebuyers in New Mexico?
The New Mexican age of first-timers is hard to come by, but the average age nationally is 38, which is an all-time high.
Photo credit: iStock/ivanastar
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Nevada First-Time Home Buying Assistance Programs & Grants
Nevada First-Time Home Buying Assistance Programs & Grants
(Last Updated – 06/2025)
The Silver State is living up to its glitzy name, but for now the prized commodity may be real estate.
Home sales prices rose 3.2% year-over-year to hit a median of $466,700 in April 2025, according to the real estate firm Redfin. Las Vegas has been on a roll, with prices up 4.2% year-over-year.
Although Nevada prices are on the high side, there are more homes on the market this year than at the same time last year, and a smaller proportion of homes are selling above list price. So first-time homebuyers and others may be able to get in on the action, especially if they take advantage of state and federal programs to help them.
Who Is Considered a First-Time Homebuyer in Nevada?
It pays to be part of the first-timers club, which is offered advantages. The group is broader than it seems at first glance. Anyone who has not owned a home in the previous three years is considered a first-time buyer when it comes to getting a home mortgage loan and enjoying other perks. Many lenders follow guidelines from the U.S. Department of Housing and Urban Development (HUD) which also count these folks as first-timers:
• Someone who has not owned a home in the last three years
• 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
4 Nevada Programs for First-Time Homebuyers
The Nevada Housing Division helps low- and middle-income first-time and repeat buyers, including veterans, achieve their homeownership goals.
Here’s a closer look at the agency’s homeownership programs, which bundle down payment assistance with a 30-year fixed-rate loan.
1. Home Is Possible for First-Time Buyers
This 30-year fixed-rate FHA, USDA, or VA loan with competitive interest rates also offers interest-free down payment assistance of up to 4% of the total loan amount. The money can also be used for closing costs.
There are purchase price and income limits determined by county. Participants must be buying a single- or two-family home, condominium, townhome, manufactured home, or four-unit home with one unit being the buyer’s residence.
A minimum FICO® credit score of 640 is required. Homebuyer education is required, which can help buyers understand how much house they can afford.
2. Home Is Possible
This loan is available to first-time and repeat buyers who do not currently own property. This 30-year fixed-rate FHA, USDA, VA, or conventional loan offers interest-free down payment and closing cost assistance of up to 5% of the total loan amount.
Income limits apply, depending on the number of borrowers and the type of loan. The maximum purchase price of the home varies by county.
A minimum credit score of 640 is required, as is homebuyer education.
3. Nevada Home Credit Certificate Program
The Nevada mortgage credit certificate program provides first-time buyers and qualified veterans a federal income tax credit of 20% of the interest paid on the mortgage loan each year, up to the federal $2,000 maximum. Any additional interest paid can be used as a tax deduction.
There are fees associated with applying for and receiving a mortgage credit certificate, but the savings from the lifetime of the credit often outweigh the fees.
4. Home at Last Rural Nevada Down Payment Assistance
This program is offered through the Nevada Rural Housing Authority and features a no-interest, no-payment second mortgage. It’s available to first-time and repeat buyers. Income limits and credit score requirements are based on the first mortgage. There are no purchase price limits and you don’t have to be a Nevada resident to qualify for this program.
Recommended: First-Time Homebuyer Guide
How to Apply to Nevada Programs for First-Time Homebuyers
As you might expect from the home of Las Vegas, the Nevada Housing Division’s website homebuyer section starts off with an illustrated game.
Step 1 is to see if you meet the qualifications of one or more of the programs, and Step 2 is to contact a participating lender and get pre-approved.
Easy-to-read details on each of the programs are available, as well as a list of lenders and real estate agents .
Lenders are well versed in the homebuyer programs and will guide applicants from start to closing.
Recommended: Understanding the Different Types of Mortgage Loans
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 50% 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 .
Nevada First-Time Homebuyer Stats for 2025
Here’s a snapshot of the typical home buying transaction in Nevada:
• Median home sale price: $466,700
• 3% down payment: $14,001
• 20% down payment: $93,340
• Average credit score (vs. the U.S. average of 715): 701
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
Nevada helps many first-time homebuyers claim their fortunes in the Silver State. Other first-time buyers in Nevada can look for the right fit on their own among 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?
First-time homebuyer classes can be key to a successful home-buying experience for anyone — no surprise, then, that these courses are required for some 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. 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 Nevada?
Yes. Nevada offers mortgage credit certificates to qualified borrowers, who can take a federal tax credit of as much as 20% of the interest paid on a first mortgage, up to $2,000 each year. The credit comes with fees but lasts for the lifetime of the first mortgage.
Is there a first-time veteran homebuyer assistance program in Nevada?
Nevada residents who can obtain a certificate of eligibility from the Department of Veterans Affairs are eligible for VA loans through a federal program.
What credit score do I need for first-time homebuyer assistance in Nevada?
Programs administered by the Nevada Housing Division and Nevada Rural Housing require a credit score of 640 or above. There are other private, state, and federal loan programs that borrowers with lower scores may be able to access.
What is the average age of first-time homebuyers in Nevada?
Data about first-time homebuyers in Nevada is hard to come by, but the average age nationally is 38, an all-time high.
Photo credit: iStock/LPETTET
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-Q225-197
Michigan First-Time Home Buying Assistance Programs & Grants
Michigan First-Time Home-Buying Assistance Programs & Grants
(Last Updated – 06/2025)
With Detroit’s revitalization, the resort towns on the shores of the Great Lakes, and the proximity to wilderness in the Upper Peninsula, Michigan real estate is hot. In April 2025, more than a third of homes were selling above list price, and home prices were up 4.6% overall. But there is good news for first-time homebuyers: The Wolverine State is still relatively affordable.
The median sales price is currently $268,900, according to Redfin, a company that analyzes real estate data. That’s far below the national median home sales price of $438,357.
If you’re currently shopping for a home in Michigan or hope to be doing so in the near future, learn about the programs that can make becoming a first-time homebuyer in Michigan that much more affordable.
Who Is Considered a First-Time Homebuyer in Michigan?
First things first: A first-time homebuyer in Michigan, as elsewhere in the country, can be someone who is buying their first home ever, but it also can be a repeat buyer who has not owned a primary home in the past three years. Some programs for first-timers also consider the following to be new buyers:
• A single parent who has only owned with a former spouse while married.
• An individual who is a displaced homemaker and has only owned with a spouse.
• An individual who has only owned a principal residence not permanently affixed to a permanent foundation in accordance with applicable regulations.
The Michigan State Housing Development Authority will waive the first-time homebuyer requirement for some of its programs for buyers in certain targeted areas.
💡 Quick Tip: When house hunting, don’t forget to lock in your home mortgage loan rate so there are no surprises if your offer is accepted.
4 Michigan Programs for First-Time Homebuyers
First-time homebuyers looking to settle in Michigan may find help through the Michigan State Housing Development Authority . Here are details about the agency’s mortgage and down payment assistance programs.
1. MI Home Loan Program
This program offers 30-year fixed-rate mortgages at below-market interest rates to first-time homebuyers and those who buy in targeted areas. The loan can be paired with the Michigan Housing down payment assistance program described below.
Household income limits apply, and depend on location and family size. Your purchase price may not exceed $544,233, and a credit score of 640 is typically required.
If you’re using the down payment assistance program, all adult household members usually need to complete a housing education course (which can help buyers understand how much house they can afford). To determine eligibility for this program and explore further, the state recommends reaching out to a participating lender .
2. Michigan $10K Down Payment Assistance Program
Michigan Home Loan borrowers may find down payment help in the form of loans for up to $10,000 throughout the state through the Michigan Down Payment Program . These second mortgages come with no interest or monthly payments. The loan must be paid back when you sell, refinance, or pay off your first mortgage.
3. Mortgage Credit Certificate
Michigan’s home mortgage credit allows first-time buyers and repeat buyers in targeted areas to claim a federal tax credit equal to 20% of their annual mortgage interest, up to $2,000 a year. Unfortunately, the Michigan Home Loan programs do not cover a mortgage credit certificate. Borrowers using conventional mortgages may be able to take the credit.
There are fees associated with applying for and receiving a mortgage credit certificate that vary by state. Often the savings from the lifetime of the credit can outweigh the fees.
Recommended: Understanding the Different Types of Mortgage Loans
4. Local Homebuyer Assistance Programs
Local housing initiatives in urban areas such as Detroit and Grand Rapids offer help with down payments, closing costs, and other assistance for first-time buyers in certain areas. It can be well worth your while to research these options online, as well as educate yourself about the ins and out of being a first-time homebuyer in general.
How to Apply to Michigan Programs for First-Time Homebuyers
A housing counselor or experienced lender can help determine which programs you might be eligible for, based on income, debt, credit score, and purchase price.
State Loan and Assistance Programs
Find and contact counseling agencies and loan officers by county if you’re interested in a Michigan housing authority mortgage and down payment assistance program.
Local Programs
Many local assistance programs are offered through lenders themselves, so it’s important to compare lending options.
HUD (the U.S. Department of Housing and Urban Development) lists local contacts that may be of help to first-time homebuyers.
MCC Program
To apply for a mortgage credit certificate, homebuyers must work through a lender approved by the Michigan State Housing Development Authority.
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, they can be especially helpful for true first-time buyers or people who haven’t owned a home in several years.
Federal Housing Administration (FHA) Loans
The FHA, which is part of HUD, insures mortgages for borrowers with lower credit scores. Homebuyers choose from a list of approved lenders that participate in the FHA loan program. Some details to note:
• 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 low credit scores (between 500 and 579) 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.
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; the cost 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.
This 97 LTV Loan is only available for one-unit single-family homes, co-ops, condos, and planned unit developments which will be used as a primary residence.
Department of Veterans Affairs (VA) Loans
Loans backed by the Department of Veterans Affairs can be offered to qualifying active-duty members of the military, veterans, reservists, and surviving spouses. These VA loans, which can be used to buy, build, or improve homes, typically have lower interest rates than most other mortgages available. What’s more, they usually don’t require a down payment. Most borrowers pay a one-time funding fee that can be rolled into the mortgage.
Another nice benefit of these loans is that they do not require private mortgage insurance (PMI) for borrowers who make a down payment of less than 20%. And VA loans have more flexible credit score requirements. In some cases, even those who have previously been in foreclosure or bankruptcy can qualify.
If you apply for a VA loan, you 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)
If you are a Native American veteran or their spouse, you may be able to use these no-down-payment loans to buy, improve, or build a home on property that’s federal trust land. Unlike the 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 about this mortgage option by emailing [email protected].
US Department of Agriculture (USDA) Loans
You don’t have to pay any down payment on these loans, which are made 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.
In addition, the USDA 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
HUD’s Good Neighbor Next Door Program can help firefighters, emergency medical technicians, police officers, and teachers qualify for mortgages in the areas they serve. Borrowers can receive 50% off a home in what HUD deems a “revitalization area,” but they must live in the home for at least three years.
💡 Quick Tip: Generally, the lower your debt-to-income ratio, the better loan terms you’ll be offered. One way to improve your ratio is to increase your income (hello, side hustle!). Another way is to consolidate your debt and lower your monthly debt payments.
Michigan First-Time Homebuyer Stats for 2025
As you think about becoming a property owner in Michigan, take a look at these figures about home buying.
• First-time homebuyers in the U.S.: 24% of all homebuyers
• Median age of first-time homebuyers in U.S.: 38
• Median home price in Michigan: $268,900
• Average down payment in Michigan: $22,500
• Average credit score in Michigan: 719
Financing Tips for First-Time Homebuyers
Along with 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 to make a one-time, penalty-free withdrawal of up to $10,000 from their IRA, provided that the funds are used to buy, build, or rebuild a home. In terms of how the IRS defines a first-time homebuyer, that would be anyone who has not owned a primary residence in the past three years.
Here’s a heads-up: You will still owe income taxes 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. Roth IRA contributions are made with after-tax money, and the IRS permits you to make 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. If you’ve held your account for less than five years, homebuyers will pay income tax on earnings they withdraw.
• 401(k) loans. There’s the possibility that your employer may allow borrowing from a 401(k) plan that it sponsors. If so, you may consider taking a loan against the 401(k) account to help finance your home purchase. Many plans permit you to borrow up to 50% of your 401(k) balance, up to $50,000, in a 12-month period without being liable for 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 25 years to pay it back.
• State and local down payment assistance programs. These programs are typically available at the regional or county level. They can offer flexible second mortgages for first-time buyers who are searching for resources that can help them afford a down payment.
• The mortgage credit certificate program. If you’re a first-time homeowner and buy in targeted areas, you may be able to 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. Take note: If you refinance your mortgage, the credit disappears, and if you sell the house before nine years, you may have to pay some of the tax credit back.
In addition, 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. Check with your employer to see if they offer access to lower-cost lenders and real estate agents in your area, as well as home buying education courses.
• Your lender. It can be worthwhile to ask your lender about any first-time homebuyer grant or down payment assistance programs that may be available from government, nonprofit, and community organizations in your area.
The Takeaway
If you are a first-time buyer in Michigan, you may be able to get help with your mortgage and down payment through state and local programs. These can lower your costs and make purchasing a property more affordable. It can also be worthwhile to consider conventional loans from private lenders; they can have advantages.
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 can be a good idea, especially for first-time homebuyers who may not yet know the jargon and steps involved when applying for a mortgage and purchasing a home. First-time homebuyer classes can help. Indeed they are required for some federal and Michigan 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, with interest rates and other loan pricing competitive with those of loans available to borrowers with higher credit scores. That said, almost any lending program has credit qualifications so it’s wise to build your score before house hunting if possible.
Is there a first-time homebuyer tax credit in Michigan?
Yes. As explained above, homebuyers may be able to claim a credit for up to 20% of the mortgage interest they pay each year, up to $2,000 a year. Upfront fees apply, but the credit can be taken each year for the life of the loan. Unfortunately, borrowers who have loans from the Michigan State Housing Development Authority are not eligible for the tax credit.
Is there a first-time veteran homebuyer assistance program in Michigan?
Many of Michigan’s homebuyer programs include veteran benefits. Michigan veterans also may find options in the federal Department of Veterans Affairs and Native American Veteran Direct Loan programs described above.
What credit score do I need for first-time homebuyer assistance in Michigan?
Most programs administered by the Michigan State Housing Development Authority require a credit score of 640 or above. But there are other state, federal, and private loan programs that borrowers who have lower scores may be able to access.
What is the average age of first-time homebuyers in Michigan?
The median age of first-time buyers nationally is 38, according to the National Association of Realtors®.
Photo credit: iStock/Peeter Viisimaa
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-Q225-192
North Carolina First-Time Home Buying Assistance Programs
North Carolina First-Time Home Buying Assistance Programs
(Last Updated – 06/2025)
Whether you’re looking for coastal charm, a quirky mountain town, big-city amenities and sports teams, or something in between, you’re likely to find it in North Carolina. Which explains why the Tar Heel State has become a magnet for new college grads, growing families, retirees, and anyone in between.
Unfortunately, that’s not so good for first-time homebuyers in North Carolina, where the median sale price of a home has been ticking steadily upward since 2020, landing at $382,400 in April 2025. In some communities, the numbers have been much higher. Prices have risen especially rapidly in Goldsboro, Wilson, and Surf City, according to real estate site Redfin.
The good news is that North Carolina first-time homebuyers may be able to get financial help through state and local programs. There also are longstanding federal programs that could improve a buyer’s chances of success.
Recommended: First-Time Homebuyer Guide
Who Is Considered a First-Time Homebuyer in North Carolina?
For most programs offered in North Carolina and elsewhere, applicants are considered first-time homebuyers if they haven’t ever owned a home (of course) or haven’t owned a home for at least the past three years. The U.S. Department of Housing and Urban Development (HUD) also classifies the following as first-time homebuyers:
• 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
3 North Carolina Programs for First-Time Homebuyers
Most first-time homebuyer programs in North Carolina are designed to help low- to moderate-income buyers who need help coming up with a down payment or closing costs.
Program participants typically must meet eligibility requirements regarding their income, credit scores, and debt-to-income (DTI) ratio. There also may be home price limits, and the home usually must be owner occupied. Also, at least one of the buyers may have to complete a homebuyer education course.
Veterans and buyers who are purchasing homes in certain census tracts may be eligible for the same perks as first-time buyers.
The North Carolina Housing Finance Agency (NCHFA) offers several programs.
1. NCHFA NC Home Advantage Mortgage
The North Carolina Home Advantage Mortgage program pairs a 30-year fixed-rate mortgage (conventional, FHA, VA, or USDA) with down payment assistance in the form of a 0% interest, no-payment, forgivable second mortgage for as much as 3% of the first mortgage amount.
The second mortgage doesn’t have to be repaid unless the home is sold, or the first mortgage is paid off or refinanced, within the first 15 years of the loan term. At the end of year 15, the second mortgage is completely forgiven.
Benefits and requirements include:
• Competitive interest rates and up to 5% down payment assistance for FHA, USDA and VA loans; 3% down payment assistance on conventional loans
• Second loan amount may be reduced by 20% annually in years 11-15
• Loan can be used to purchase a single-family home, townhouse, condominium, townhouse, duplex (FHA loans only), or new manufactured home (FHA, VA, or USDA loans only; minimum 660 credit score)
• Borrowers’ annual income cannot exceed $140,000
• Minimum credit score of 640
• Maximum DTI ratio of 43%
• Available to first-time and repeat homebuyers
A participating lender can help you get started; find a lender online or call 1-800-393-0988.
2. NCHFA NC 1st Home Advantage Down Payment
If you are a first-time homebuyer or military veteran purchasing a home with an NC Home Advantage Mortgage, you may be eligible for $15,000 in down payment assistance through the NC 1st Home Advantage Down Payment program.
The down payment assistance comes as a 0% interest deferred second mortgage that doesn’t have to be repaid unless the home is sold, or the first mortgage is paid off or refinanced, within the first 15 years of the loan term.
Benefits and requirements include:
• Loan amount may be reduced by 20% annually in years 11-15
• Must meet requirements for and obtain an NC Home Advantage Mortgage
• Limited to first-time homebuyers, veterans, and those borrowing within targeted census tracts
A participating lender can help you get started; or call 1-800-393-0988.
3. NCHFA Community Partners Loan Pool
The Community Partners Loan Pool is another way for low- and moderate-income homebuyers to receive down payment assistance. The assistance is structured as a 0% interest, deferred second mortgage with a term that matches the borrower’s first mortgage term. The loan has no monthly payment and is usually repaid when the home is sold or at the end of the loan term.
Only newly constructed homes or existing homes in “like new” condition (less than 10 years old or with an effective life of 10 years or less) are eligible. Older homes that have been comprehensively rehabilitated may be eligible.
Benefits and requirements include:
• Up to 25% of the home’s purchase price, not to exceed $50,000, when combined with an NC Home Advantage Mortgage
• Up to 10% of the purchase price when combined with a USDA Section 502 loan
• Income and sales price limits apply
• Borrower must prove sufficient, stable income to afford and maintain the purchased home
• Minimum credit score of 640
• Maximum DTI ratio is 45%
• Must complete an approved homebuyer education course and at least two hours of housing counseling. (Borrowers must establish a plan for education and counseling before signing a sales contract on a property.)
To apply, contact a community partner .
Recommended: Understanding Mortgage Basics
Other North Carolina Homebuyer Programs
If you’ve already chosen the North Carolina city or county you hope to make your home, you also may want to research local buyer assistance programs.
For example, the city of Greensboro’s Neighborhood Development Department offers eligible homebuyers up to $10,000 in down payment assistance (not to exceed 20% of their home’s overall purchase price) in the form of a 0% interest, no-payment second mortgage that is forgiven after five years of living in the home. For eligibility requirements, check out the Homebuyer Down Payment Assistance Program .
If you can’t find assistance in your chosen location, check back occasionally for offers. Some first-time homebuyer programs base their opportunities (and deadlines) on the funds they expect to become available. When their money runs out, they may press pause.
How to Apply to North Carolina Programs for First-Time Homebuyers
For most mortgage and assistance programs, contacting a participating lender is the first step. Follow the links provided.
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 DTI ratio. FHA loans allow a DTI ratio of up to 50% 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 mortgage insurance premium (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
Active-duty members of the military, veterans, and eligible family members 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 2025
You’re probably wondering where you fit amid the mix of buyers who are out there shopping for their first home — or first in a while. Here are some stats from a recent National Association of Realtors® Profile of Home Buyers and Sellers and the homebuying site Redfin:
• Percentage of buyers nationwide who are first-time buyers: 24%
• Median household income of first-time buyers nationwide: $97,000
• Median down payment of first-time homebuyers: 9%
• Median age of first-time homebuyers: 38
• Sources of funding for first-time buyers:
• Savings: 69%
• Loans or gifts from family or friends: 25%
• Financial assets: 21%
• Inheritance: 7%
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. AAlways 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
Low- and moderate-income North Carolina first-time homebuyers have an array of mortgage and down payment assistance programs to aim for. Other first-time buyers who are shopping for a home in the state will have many possible mortgage options and with smart searching can find a good fit.
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 first-time homebuyer course. Being informed is key to a successful home-buying experience for anyone, but especially for newcomers, who can easily be overwhelmed. First-time homebuyer classes can help; in fact, 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. That said, almost any lending program has credit qualifications.
What credit score do I need for first-time homebuyer assistance in North Carolina?
Most homebuyer programs in North Carolina require a minimum credit score of 640. But requirements may vary from one program or organization to the next, and some programs may use criteria other than credit scores to determine a borrower’s eligibility.
Is there a first-time homebuyer tax credit in North Carolina?
There is not currently a mortgage credit certificate program offered through the North Carolina Housing Finance Agency, although there has been one in the past. Homebuyers should check with their lender or tax advisor as tax policies change periodically.
Is there a first-time homebuyer assistance program for veterans in North Carolina?
North Carolina Housing offers down payment assistance to veterans through the NC 1st Home Advantage Down Payment program. Nationwide, VA loans are available to eligible service members, veterans, and eligible surviving spouses.
What is the average age of first-time homebuyers?
The median is 38, according to the National Association of Realtors®.
Photo credit: iStock/zimmytws
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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.
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Maryland First-Time Home Buying Assistance Programs & Grants
Maryland First-Time Home-Buying Assistance Programs & Grants
(Last Updated – 06/2025)
Whether you’re looking in one of the Washington, DC, bedroom communities, the Maryland capital of Annapolis, or close to the shores of the Chesapeake Bay, house hunting in Maryland can come with some steep price tags.
The current average home value as of April, 2025 is $433,956, up 2.4% year over year, vs. the national average of $367,711 (rising 1.4%), per Zillow.
Fortunately, a range of homebuyer assistance programs are available for first-time buyers with their hearts set on owning a piece of the Old Line State. These can help qualifying buyers with down payment, mortgage, and closing costs. There are also federal programs that can help make purchasing a property more affordable, too.
Who Is Considered a First-Time Homebuyer in Maryland?
First of all, a first-time homebuyer isn’t necessarily someone who has never owned a home. Anyone who has not owned a home in the past three years is also considered a first-time homebuyer in Maryland and elsewhere.
The Maryland Mortgage Program allows honorably discharged veterans who haven’t previously used their first-time buyer exemption and buyers in targeted areas of the state to apply for some of its first-time buyer programs even if they are repeat buyers.
Homebuyer education classes are required for Maryland Mortgage Program first-time buyer programs. This can help buyers understand how much mortgage they can afford.
💡 Quick Tip: Buying a home shouldn’t be aggravating. SoFi’s online mortgage application is quick and simple, with dedicated Mortgage Loan Officers to guide you through the process.
Maryland Programs for First-Time Homebuyers
The Maryland Mortgage Program, sponsored by the Maryland Department of Housing and Community Development, offers a couple of mortgage types and a variety of down payment assistance programs.
The state is also unusual in that it has a program for disabled homebuyers and those with student debt. Here’s more.
1. 1st Time Advantage
Maryland’s 1st Time Advantage program offers 30-year fixed-rate mortgages, which can be conventional loans or government-guaranteed FHA, USDA, or VA loans. These typically have competitive interest rates and may be paired with several second mortgage options for down payment assistance (see #5, below, for details).
Borrowers must be first-time homeowners. For buyers in some targeted areas of the state and for most veterans, the first-time homeowner requirement does not apply.
There are several versions of these 1st Time Advantage loans, some with down payment assistance, or DPA, in the form of zero-percent second mortgages. Household income limits are based on location and household size . (In targeted areas , household income may be slightly higher.) Household income is based on all sources of income for everyone 18 and older who will be living in the house. Purchase price limits also exist and depend on location.
Borrowers must have a FICO® credit score of at least 640 for government-insured loans and at least 640 to 680 for conventional loans. All borrowers must complete homebuyer education.
2. Flex Loans
The Flex Loan program is similar to the 1st Time Advantage loans but is available to repeat buyers as well as first-timers. It includes down payment and closing cost assistance in the form of a 0% interest second mortgage.
3. HomeAbility
If you are disabled or you are a guardian and principal caregiver for an immediate family member you live with who is disabled, Maryland’s HomeAbility program offers a 30-year fixed-rate conventional loan for 95% of the purchase price and a 0% interest second loan of up to 25% of the purchase price for a down payment or closing costs.
Payments on the second loan are deferred for the life of the first mortgage.
The income limits are lower than limits (up to 80% of the Area Median Income, or AMI) than those of other Maryland Mortgage Program loans. Applicants must document the disability.
4. Maryland SmartBuy 3.0
The Maryland SmartBuy 3.0 program allows borrowers with a minimum student debt balance of $1,000 to borrow up to 15% of the home purchase price, up to $20,000, to use to pay off outstanding student debt. This is a second loan, not a second mortgage.
The full student debt of at least one of the borrowers must be paid off at the time of home purchase.
The zero-interest loan has no payments, and 20% of the loan is forgiven each year over the course of five years. If the borrower sells before that time, the remaining balance must be repaid. Borrowers must meet the same eligibility requirements as other Maryland Mortgage Program loans.
5. Maryland Down Payment Assistance
The Maryland Mortgage Program offers a variety of down payment assistance programs for both the 1st Time Advantage and Flex mortgages.
For the 1st Time Advantage program, down payment assistance includes:
1st Time Advantage 6000, a $6,000 loan for down payment and closing costs with a 0% interest rate and no payments for the life of the first mortgage. This loan is eligible for Partner Match funds. With Partner Match , if you’ve obtained other down payment assistance, say from an employer or community organization, Maryland will match that assistance, up to $2,500, through a 0% interest loan.
• 1st Time Advantage 3% Loan, a down payment assistance second mortgage equal to 3% of the first mortgage.
• 1st Time Advantage 4% Loan, a down payment assistance second mortgage equal to 4% of the first mortgage.
• 1st Time Advantage 5% Loan, a down payment assistance second mortgage equal to 5% of the loan.
Borrowers must meet the same eligibility requirements as the 1st Time Advantage mortgage.
The Flex program down payment assistance includes:
• Flex 5000, a $5,000 loan for down payment and closing costs with a 0% interest rate and no payments for the life of the first mortgage. This loan is also eligible for Partner Match funds.
• Flex 3% Loan, a down payment assistance second mortgage equal to 3% of the first mortgage.
6. Local Homebuyer Assistance Programs
Certain cities and areas in Maryland also have first-time homebuyer assistance programs. For example, the Maryland Mortgage Program partners with Montgomery County to offer additional down payment assistance to first-time buyers in this area near Washington, D.C. And Baltimore, Maryland’s most populous city, offers several home buying assistance programs.
Here are other programs by city or county.
Recommended: Understanding the Different Types of Mortgage Loans
How to Apply to Maryland Programs for First-Time Homebuyers
In addition to the links provided above, the Maryland Department of Housing and Community Development provides details for all of its Maryland Mortgage Program loans and down payment assistance.
The agency does not lend directly but does list participating lenders . HomeAbility is only offered by lenders who have achieved gold or silver status.
Maryland SmartBuy financing is available through these approved lenders . A lender will guide and inform you as you move through the process. This can be 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.
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. Some points to know:
• 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.
• 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.
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.
💡 Quick Tip: Don’t have a lot of cash on hand for a down payment? The minimum down payment for an FHA mortgage loan is as low as 3.5%.1
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; however, costs may be lower 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
Active-duty members of the military, veterans, and eligible family members 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. To learn more, 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 certain professionals, such as 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.
Maryland First-Time Homebuyer Stats for 2024
Here’s a snapshot of a typical Maryland home sales transaction.
• Average home value: $433,956
• 3% down payment: $13,018
• 20% down payment: $86,791
• Average credit score (vs. 715 nationwide): 715
Recommended: First-Time Home Buyer Guide
Financing Tips for First-Time Homebuyers
Along with 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. When a buyer is withdrawing for a home purchase, 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 or even 25 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.
• 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
Maryland has several options that can help prospective homebuyers with their down payment, mortgage and closing costs. Typically, borrowers must meet income and other qualifications to access funding. Those who don’t qualify for Maryland’s housing programs may find financing via government-insured or 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?
Yes! Good information is key to a successful home-buying experience for anyone, but especially for newcomers, who can easily be overwhelmed by the jargon, technicalities, and magnitude of applying for a mortgage and purchasing a home. What’s more, first-time homebuyer classes are required for some 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. 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 Maryland?
Maryland previously offered mortgage credit certificates but has suspended the program. The website says the state will continue to reissue credit certificates for refinanced mortgages with approved lenders.
Is there a first-time veteran homebuyer assistance program in Maryland?
Veterans Affairs loans are part of the Maryland Mortgage Program, and honorably discharged veterans can likely take advantage of first-time buyer loans. (Some who are not first-time buyers may benefit, too.) Maryland veterans may also may find options in the federal VA loan programs.
What credit score do I need for first-time homebuyer assistance in Maryland?
Programs administered by the Maryland Mortgage program require a credit score of 640 or above for government-insured loans and a minimum score of 640 to 680 for conventional loans, depending on the lender. There are other private, state, and federal loan programs that borrowers with lower scores may be able to access.
What is the average age of first-time homebuyers in Maryland?
There seems to be little data about first-time homebuyers in Maryland, but the average age nationally is 38.
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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.
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