By Walecia Konrad

(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.

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

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

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.

By Walecia Konrad

(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

Who Is Considered a First-Time Homebuyer in Minnesota?

The definition is broader than you might realize. You are considered a first-time homebuyer in Minnesota if you haven’t owned a home in the last three years. That means you may be eligible for certain types of mortgage loans.

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

Also worth noting: Veterans often qualify for the same programs as first-time buyers.

💡 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.

Minnesota Programs for First-Time Homebuyers

There are a couple mortgage loans and down payment assistance programs for the first-time homebuyer in Minnesota.

1. Minnesota Housing: Start Up for First-Time Homebuyers

Minnesota Housing has partnered with participating lenders to offer low-interest mortgage loans to first-time homebuyers. There is typically a 3% down payment, affordable interest rates, and income limits (up to $142,800 in 2025, for example).

To qualify, you must meet income and purchase price limits .

2. Minnesota Housing: Down Payment and Closing Cost Loans

Minnesota Housing can also help with down payment and closing costs through a loan that is available along with the Start Up loan. The monthly payment loan option is available up to $18,000.

There is also an interest-free deferred payment loan option, with repayment due if you move, sell the home, refinance, or pay off your first loan.

As you are weighing your home-buying options, consider using an online mortgage calculator to help you determine what your monthly payments will be.

How to Apply to Minnesota Programs for First-Time Homebuyers

Pay careful attention to the criteria to qualify for any first-time homebuyer program in Minnesota. Some may have income or purchase-price limits. Contact [email protected] with any questions about eligibility you may have.

In addition, it’s a good idea to understand mortgage basics before applying for a 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. It’s important to check details to make sure you access the right programs for your needs and situation.

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. 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 (meaning between 500 and 579) as low as 500 must put at least 10% down.

In addition to examining your credit score, lenders will look at your debt-to-income ratio (DTI, your monthly debt payments compared with your monthly gross income). FHA loans allow a DTI ratio of up to 57% in some cases, vs. a typical 45% to 50% maximum for a conventional loan.

Gift money for the down payment may be allowed from certain donors and will be documented in a gift letter for the mortgage.

Worth noting: FHA loans do 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. To learn more about these loans, including FHA loans for refinance and rehab of properties, read up on FHA requirements, loan limits, and rates.

Freddie Mac Home Possible Mortgages

Very low- and low-income borrowers may make a 3% down payment on a Home Possible^® mortgage. These loans allow various sources for down payments, including co-borrowers, family gifts, employer assistance, secondary financing, and sweat equity.

The Home Possible mortgage is for buyers who have a credit score of at least 660.

Once you pay 20% of your loan, the Home Possible mortgage insurance will be canceled, which will lower your mortgage payments.

Fannie Mae HomeReady Mortgages

Fannie Mae HomeReady^® Mortgages allow down payments as low as 3% for low-income borrowers. Applicants generally need a credit score of at least 620; pricing may be better for credit scores of 680 and above. Like the Freddie Mac program, HomeReady loans allow flexibility for down payment financing, such as gifts and grants.

For income limits, a comparison to an FHA loan, and other information, go to this Fannie Mae site .

Fannie Mae Standard 97 LTV Loan

The conventional 97 LTV loan is for first-time homebuyers of any income level who have a credit score of at least 620 and meet debt-to-income criteria. The 97% loan-to-value mortgage requires 3% down. Borrowers can get down payment and closing cost assistance from third-party sources.

Unlike an FHA loan, the 97 LTV loan has no upfront mortgage insurance fee and does have cancellable mortgage insurance. The loan is for just one-unit single-family homes, co-ops, condos, and planned unit developments.

Department of Veterans Affairs (VA) Loans

Eligible active-duty members of the military, veterans, reservists, and surviving spouses may apply for loans backed by the Department of Veterans Affairs. Here’s a closer look:

•   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.

•   VA loans do not require private mortgage insurance (PMI) for borrowers who make a down payment of less than 20%.

•   The loans have more flexible credit score requirements. In some cases, even those who have previously been in foreclosure or bankruptcy can qualify.

Borrowers applying for a VA loan will need a Certificate of Eligibility from the VA so make sure to review a guide to qualifying for a VA loan as a first step in the process.

💡 Quick Tip: Apply for a VA loan and borrow up to $1.5 million with a fixed- or adjustable-rate mortgage. The flexibility extends to the down payment, too — qualified VA homebuyers don’t even need one!^{†^}

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. For more information about this program, contact [email protected].

US Department of Agriculture (USDA) Loans

If you are finding it challenging to accumulate a down payment, consider this option. 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 first responders, such as police officers, firefighters, and emergency medical technicians, as well as 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. Find out more from the Minnesota HUD office in Minneapolis by calling (612) 370-3000.

First-Time Homebuyer Stats for 2025

Here’s some data about Minnesota home sales. As you think about homeownership, it can be wise to check out a first-time homebuyer guide, to learn more about the process and lingo used.

•  First time homebuyers nationwide: 24% of all homebuyers

•  Median age of first-time homebuyers in U.S.: 38

•  Median down payment in Minnesota: $43,850

•  Average home price in Minnesota: $346,239

•  Average credit score in Minnesota: 742 (vs. 715 nationwide)

Financing Tips for First-Time Homebuyers

In addition to federal and state government-sponsored lending programs, there are other financial strategies that may help you become a homeowner. After reading up on how to choose a mortgage term, check out these tips on how to fund your home purchase.

•  Traditional IRA withdrawals. You can tap this kind of IRA/ 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 the purpose of IRA withdrawals 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 set your retirement savings back.

•  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, take note: Homebuyers will pay income tax on earnings withdrawn.

•  401(k) loans. If your employer allows you to borrow 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

As a first-time homebuyer in Minnesota, there are several state and federal financial assistance programs that can help you pay for a home, as long as you qualify. These include programs that can assist with mortgage, down payment, and other costs. In addition, there are conventional loan options that might also be right for your needs.

By Susan Guillory

(Last Updated – 06/2025)

If you’re looking for wide-open spaces and untamed beauty, Montana has plenty to offer. You won’t feel crowded here — the population density is low. And the lifestyle is quieter, slower, and more peaceful than it is in many other places.

The biggest challenge for the first-time homebuyer in Montana may be finding an affordable house to purchase: In April 2025, according to Redfin, the median sale price of a home in Montana was up 2.6% year-over-year and was weighing in at a hefty $528,500.

If you’re a first-time home buyer in Montana, there are programs to support you as you achieve your dream of owning a home. This home-buying guide will show you how to save money.

3 Montana Programs for First-Time Homebuyers

There are several state-based programs that offer low-interest mortgage loans and assistance with closing costs and down payments. Many are income-based, so the first-time homebuyer in Montana may need to meet income limits and other criteria to qualify. Here are the facts you need to know about each program.

1. Montana Housing: Bond Advantage Down Payment Assistance Program

If you’re looking for financial assistance to help cover your down payment as a first-time homebuyer, the Montana Housing: Bond Advantage Down Payment Assistance Program may be able to help with this loan of up to 5% of the sale price, with a maximum of $15,000. You must first be eligible for a Regular Bond Program Loan. The down payment assistance is a 15-year amortizing loan with low monthly payments.

You must also have a Montana Housing 30-year first mortgage to qualify, as well as a credit score of at least 620. You will be required to take a Homebuyer Education class to learn mortgage basics, and provide at least $1,000 cash investment in the purchase.

2. Montana Housing: MBOH Plus 0% Deferred Down Payment Assistance Program

This program offers a 0% interest deferred loan that can be used for down payment and closing costs. You can receive up to 5% of the sales price, up to $15,000. The loan is due when you transfer or sell the property or refinance or pay off your first loan.

To qualify, you need a Montana Housing 30-year first mortgage, a credit score of at least 620, and a debt-to-income ratio that’s no more than 45%. There is a household income limit — $80,000 for 1 to 2 people, and $90,000 for 3 or more.

You must provide at least $1,000 in cash investment toward the purchase and take a Homebuyer Education class.

3. Montana Housing: Regular Bond Program

This program provides lower-income first-time home buyers in Montana with a 30-year, low-interest loan. You must qualify for an FHA, VA, RD, or HUD-184 first mortgage loan to be eligible. Additionally, you must meet income and purchase price limits. Learn more about how to apply here .

Recommended: Home Affordability Calculator

How to Apply to Montana Programs for First-Time Homebuyers

For most of these assistance programs, you’ll need to start by finding a lender that participates . They can review your information to let you know if you qualify.

In addition, as a first-time home buyer in Montana, it can make sense to learn about other ways to lower your mortgage payment.

Federal Programs for First-Time Homebuyers

There are several federal programs designed for people who have low credit scores or limited cash for a down payment. They can be especially helpful to people who are buying a first home or who haven’t owned a home in several years.

These 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.

Regional loan centers are closed to the public, but you can contact the Department of Veterans Affairs for Montana at (406) 324-3742 or [email protected]. For information specific to the Native American Direct Loan, contact [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 .

First-Time Homebuyer Stats for 2025

•   Median home sale price in Montana: $528,500

•   3% down payment: $15,855

•   20% down payment: $105,700

•   Percentage of buyers nationwide who are first-time buyers: 24%

•   Median age of first-time homebuyers: 38

•   Average credit score (vs. average U.S. score of 715): 732