Jun

2025

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Jun

18

2025

Decoding Markets: The Fed’s June Statement

By Mario Ismailanji | | Comments Off

New Projections

As anticipated, the Federal Open Market Committee held its benchmark federal funds rate steady in a target range of 4.25%-4.50% for the fourth consecutive meeting. With market pricing beforehand showing a near-zero chance of an interest rate move, investor focus immediately shifted to the quarterly Summary of Economic Projections (SEP). Here, the Federal Reserve painted a decidedly more challenging picture of the road ahead.

The median forecast for 2025 shows real GDP growth cut from 1.7% to 1.4% and unemployment revised higher from 4.4% to 4.5%. Critically, expectations for core PCE, which strips out food and energy prices and is the Fed’s preferred inflation measure, saw an increase from 2.8% to 3.1%.

Fed Summary of Economic Projections

The combination of both higher unemployment and higher inflation are the hallmark of stagflation, which can often strain monetary policy. Higher inflation would suggest higher interest rates to push back on inflation, but higher unemployment would suggest lower interest rates to support the economy. In this instance, the Fed split the difference and kept its year-end 2025 interest rate estimate steady at 3.9%, while lowering its 2026 rate cut expectation from two cuts to one cut — a subtle, but hawkish, signal.

Inflation Boogeyman

The Federal Reserve’s heightened anxiety over inflation is not an isolated view. Across financial markets, investors and analysts broadly agree that price pressures are likely to make a comeback in the second half of the year. This shared view provides credibility to the Fed’s hawkish stance, keeping volatility from getting out of control.

Inflation swaps — derivatives used by institutional investors to price and hedge against changes in the Consumer Price Index — are showing that year-over-year inflation is expected to accelerate to 3.3% in November, versus the latest reading of 2.4%.

The drivers of this fear are twofold. First and foremost is the uncertainty surrounding trade policy. The prospect of broad and sustained tariffs threatens to directly increase the cost of imported goods and disrupt global supply chains. That could fuel a new wave of inflation that may be too large and broad for the Fed to simply look past as a one-time shock. Second, intensifying geopolitical conflict between Israel and Iran has caused a spike in oil prices, a classic inflationary catalyst that can lead to higher costs for consumers at the gas pump and in air fares, electricity, and more.

Oil and Tariffs Threaten the Disinflation Dynamic

This forward-looking anxiety is partly why investors largely shrugged off the cooler-than-expected May CPI report (the fourth downside surprise in a row). The inflationary impact of tariffs, which were only recently implemented, has yet to fully materialize in official statistics. For what it’s worth, Fed Chair Jerome Powell noted that “with uncertainty as elevated as it is, no one holds these rate paths with a lot of conviction” and “we feel like we’re going to learn a great deal more over the summer about tariffs.”

That sounds like a recipe for a status quo monetary policy until more information is available, seemingly ruling out a July rate cut, barring a major surprise.

Market Stalemate

Market price action around the release of the Fed statement was interesting, as for a brief moment, it looked like investors were ready to fight the Fed (a market no-no). Immediately following the 2 PM announcement, yields on 2-year Treasurys dropped 4bps. This knee-jerk move suggested the market was initially focusing on the Fed’s gloomier economic forecasts, betting that weaker growth and higher unemployment would ultimately force the central bank to cut rates more aggressively than it expected to.

That narrative shifted during Powell’s subsequent press conference and hawkish tone. It became clear that the Fed was in no rush to act. He stated that they were already beginning to see some tariff effects, but that officials would wait until the full impact became clearer — a direct counter to investors’ initial dovish reaction.

Treasury yields began steadily rising, with the 2-year yield basically back to where it was before the statement was released and effectively unchanged from the previous day. The situation was similar for stocks. The S&P 500, up about 0.3% before the meeting and as much as 0.5% after the statement release, ended the day a whisker below where it began.

Intraday Price Action

For investors, the key takeaway is the state of indecision gripping the market. The initial drop in bond yields, the ensuing reversal, and the bumpy final hour of trading all reflect the uncertainty around accurately forecasting in what is an unprecedented environment. Will tariffs eventually be wiped away, stay at current levels, or be ratcheted higher? And beyond the effective tariff rate itself, will consumers or businesses bear the burden of paying the added tax on goods?

Rather than navigate this landscape of unanswerable questions, the path of least resistance for investors may be, for now, to simply stand still.

Want more insights from SoFi’s Investment Strategy team? The Important Part: Investing With Liz Thomas, a podcast from SoFi, takes listeners through today’s top-of-mind themes in investing and breaks them down into digestible and actionable pieces.

Listen & Subscribe

SoFi can’t guarantee future financial performance, and past performance is no indication of future success. This information isn’t financial advice. Investment decisions should be based on specific financial needs, goals and risk appetite.

Communication of SoFi Wealth LLC an SEC Registered Investment Adviser. Information about SoFi Wealth’s advisory operations, services, and fees is set forth in SoFi Wealth’s current Form ADV Part 2 (Brochure), a copy of which is available upon request and at www.adviserinfo.sec.gov. Mario Ismailanji is a Registered Representative of SoFi Securities and Investment Advisor Representative of SoFi Wealth. Form ADV 2A is available at www.sofi.com/legal/adv.

Jun

18

2025

North Dakota First-Time Home Buying Assistance Programs & Grants for 2025

By Dana Jennings Jelter | mortgage | Comments Off

North Dakota First-Time Home-Buying Assistance Programs & Grants

North Dakota First-Time Home Buying Guide

Who Is Considered a First-Time Homebuyer in North Dakota?

The definition of “first-time homebuyer in North Dakota” may vary, depending on the types of mortgage loans and financial assistance you’re looking at. Some may require you to have never owned a home at all, while others may consider you a first-time homebuyer if you are a single parent who has only owned a home with a partner while married, or a displaced homemaker who has only owned a home with a spouse.

It’s a good idea to be clear on each program’s eligibility requirements. And if you’re cost-conscious, it can’t hurt to start home-shopping in one of North Dakota’s best affordable places to live, such as Grafton or Jamestown.

5 North Dakota Programs for First-Time Homebuyers

There are several state programs that provide financial assistance and low-interest mortgage loans to the first time home buyer in North Dakota. Many of these programs are designed to help low- to moderate income buyers, and they may have income and purchase price limits, a required credit score, or other criteria you’ll need to meet.

The North Dakota Housing Finance Agency offers the following for first-time homebuyers:

NDHFA: FirstHome
NDHFA: DCA Program
NDHFA: HomeAccess
NDHFA: Start
NDHFA: Targeted Area Loans

1. NDHFA: FirstHome

The North Dakota Housing Finance Agency’s First Home program provides low-interest mortgages to low-income first-time buyers. To qualify, you must be a first-time homebuyer in North Dakota (you can’t have owned a principal residence in the last three years) and you must meet income and purchase price limits. You are also required to make a $500 investment and occupy the home as your primary residence, and you’ll need to take a homebuyer education class.

Bear in mind that if you exceed the income and/or purchase price limits, you may be able to apply for the North Dakota Roots Program, which offers conforming mortgages to both first-time and repeat homebuyers.

2. NDHFA: DCA Program

NDHFA also offers low-income buyers assistance with affordable mortgages that include help with down payments and closing costs. The down payment and closing cost assistance equals 3% of the first mortgage loan amount and comes as a credit toward your out-of-pocket cash requirement.

To qualify, you must meet the income limits for your family size and county. This option only applies for one- or two-unit properties, and one unit must be occupied by you. You’ll need to complete a homebuyer education course.

3. NDHFA: HomeAccess

While it’s not exclusively for the first-time homebuyer in North Dakota, the HomeAccess program offered by NDHFA may be worth looking at, especially if you are a single parent, a veteran, disabled, or over age 65. To qualify for affordable financing for a home, you must meet income and purchase price limits.

4. NDHFA: Start

Another option for low- to moderate-income buyers is the Start program. This program, which is not just for first-time buyers, offers affordable financing that includes down payment and closing cost assistance, up to 3% of the first mortgage. To qualify, you must be purchasing a one- or two-unit property and living in one unit.

5. NDHFA: Targeted Area Loans

Low-interest loans are also available to both first-time and repeat homebuyers moving to targeted census tracts. There are property value and income limits, but they tend to be a little more generous than the limits on some other loans. Instructions for finding out if your home is in a targeted area are on the NDHFA site.

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Recommended: First-Time Homebuyer Guide

How to Apply to North Dakota Programs for First-Time Homebuyers

Carefully review the requirements for all first-time homebuyer programs in North Dakota, particularly income and purchase price limits, to see if you meet the criteria. You’ll generally need to contact a lender to participate in any given program.

Federal Programs for First-Time Homebuyers

Several federal government programs are designed for people who have low credit scores or limited cash for a down payment. Although most of these programs are available to repeat homeowners, like state programs, they can be especially helpful to people who are buying a first home or who haven’t owned a home in several years.

The mortgages are generally for single-family homes, two- to four-unit properties that will be owner occupied, approved condos, townhomes, planned unit developments, and some manufactured homes.

Federal Housing Administration (FHA) Loans

The FHA, which is part of the U.S. Department of Housing and Urban Development (HUD), insures mortgages for borrowers with lower credit scores. Homebuyers choose from a list of approved lenders that participate in the FHA loan program. Loans have competitive interest rates and require a down payment of 3.5% of the purchase price for borrowers, who typically need FICO^® credit scores of 580 or higher. Those with scores as low as 500 must put at least 10% down.

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

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

FHA loans always require mortgage insurance: a 1.75% upfront fee and annual premiums for the life of the loan, unless you make a down payment of at least 10%, which allows the removal of mortgage insurance after 11 years. For a $300,000 mortgage balance, upfront MIP would be around $5,250 and monthly MIP, at a rate of 0.55%, would be around $137. You can learn more about these loans, including FHA loans for refinance and rehab of properties, by reading up on FHA requirements, loan limits, and rates.

Freddie Mac Home Possible Mortgages

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

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

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

Fannie Mae HomeReady Mortgages

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

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

Fannie Mae Standard 97 LTV Loan

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

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

Department of Veterans Affairs (VA) Loans

Eligible active-duty members of the military, veterans, reservists, and surviving spouses may apply for loans backed by the Department of Veterans Affairs. VA loans, which can be used to buy, build, or improve homes, have lower interest rates than most other mortgages and don’t require a down payment. Most borrowers pay a one-time funding fee that can be rolled into the mortgage.

VA loans do not require private mortgage insurance (PMI) for borrowers who make a down payment of less than 20%. And they have more flexible credit score requirements. In some cases, even those who have previously been in foreclosure or bankruptcy can qualify.

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

Native American Veteran Direct Loans (NADLs)

Eligible Native American veterans and their spouses may use these no-down-payment loans to buy, improve, or build a home on federal trust land. Unlike VA loans listed above, the Department of Veterans Affairs is the mortgage lender on NADLs. The VA requires no mortgage insurance, but it does charge a funding fee. You can learn more by emailing [email protected].

US Department of Agriculture (USDA) Loans

No down payment is required on these loans to moderate-income borrowers that are guaranteed by the USDA in specified rural areas. Borrowers pay an upfront guarantee fee and an annual fee that serves as mortgage insurance.

The USDA also directly issues loans to low- and very low-income people. For loan basics and income and property eligibility, head to this USDA site .

HUD Good Neighbor Next Door Program

This program helps police officers, firefighters, emergency medical technicians, and teachers qualify for mortgages in the areas they serve. Borrowers can receive 50% off a home in what HUD calls a “revitalization area.” They must live in the home for at least three years. For more information, visit the HUD program page.

First-Time Homebuyer Stats for 2025

• Median home list price in North Dakota: $355,000

• 3% down payment: $10,650

• 20% down payment: $71,000

• 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): 733

Financing Tips for First-Time Homebuyers

As you learn about mortgage basics and how to choose mortgage term loans, you may want to also learn how to lower your mortgage payment. Here are some tips that can help.

• Traditional IRA withdrawals. The IRS allows qualifying first-time homebuyers a one-time, penalty-free withdrawal of up to $10,000 from their IRA if the money is used to buy, build, or rebuild a home. The IRS considers anyone who has not owned a primary residence in the past two years a first-time homebuyer. You will still owe income tax on the IRA withdrawal. If you’re married and your spouse has an IRA, they may also make a penalty-free withdrawal of $10,000 to purchase a home. The downside, of course, is that large withdrawals may jeopardize your retirement savings.

• Roth IRA withdrawals. Because Roth IRA contributions are made with after-tax money, the IRS allows tax- and penalty-free withdrawals of contributions for any reason as long as you’ve held the account for five years. You may also withdraw up to $10,000 in earnings from your Roth IRA without paying taxes or penalties if you are a qualifying first-time homebuyer and you have had the account for five years. With accounts held for less than five years, homebuyers will pay income tax on earnings withdrawn.

• 401(k) loans. If your employer allows borrowing from the 401(k) plan that it sponsors, you may consider taking a loan against the 401(k) account to help finance your home purchase. With most plans, you can borrow up to 50% of your 401(k) balance, up to $50,000, in a 12-month period without incurring taxes or penalties. You pay interest on the loan, which is paid into your 401(k) account. You usually have to pay back the loan within five years, but if you’re using the money to buy a house, you may have longer to repay.

• State and local down payment assistance programs. Usually offered at the regional or county level, these programs provide flexible second mortgages for first-time buyers looking into how to afford a down payment.

• 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.

And finally, here’s a mortgage calculator you can use to figure out what your monthly payments for a home would be.

The Takeaway

Qualified first-time homebuyers in North Dakota may be able to take advantage of one or more state programs that provide low-interest mortgages and down payment assistance. There are also federal programs and conventional mortgage options to help you afford a home of your own.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

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FAQ

Should I take first-time homebuyer classes?

Yes! These classes are helpful for homebuyers generally, and they are required for some government-sponsored loan programs.

Do first-time homebuyers with bad credit qualify for homeownership assistance?

Often they do. Many government and nonprofit homeowner assistance programs are available to people with low credit scores. And often, interest rates and other loan pricing are competitive with those of loans available to borrowers with higher credit scores. That said, almost any lending program has credit qualifications. That’s why it’s important to take all possible steps to improve your credit standing before you go house hunting.

Is there a first-time homebuyer tax credit in North Dakota?

Yes, a Primary Residence Credit of up to $500 was established during the 2023 Legislative Session. The credit provides all North Dakota homeowners with the option to apply for a state property tax credit through the North Dakota Office of State Tax Commissioner.

Is there a first-time veteran homebuyer assistance program in North Dakota?

Yes. The U.S. Department of Veterans Affairs offers home loans to servicemembers, veterans, and eligible surviving spouses.

What credit score do I need for first-time homebuyer assistance in North Dakota?

Credit score requirements vary, depending on the homebuyer assistance program. FHA loans offer lower interest rates for borrowers with credit scores of at least 580, while the Home Possible mortgage requires a credit score of at least 660.

What is the average age of first-time homebuyers in North Dakota?

In the U.S., the median age of first-time homebuyers is 38.

Photo credit: iStock/Jacob Boomsma

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Jun

18

2025

Washington, D.C. First-Time Home Buying Assistance Programs & Grants for 2025

By Dana Jennings Jelter | mortgage | Comments Off

Washington, D.C. First-Time Home-Buying Assistance Programs & Grants

Washington, D.C. First-Time Home Buying Guide

Home to the White House, perhaps the most famous U.S. residence, Washington, D.C., is not a city or a state. Nonetheless, it is the 22nd most populous city in the country, with more residents than all of Wyoming or Vermont. The district’s 120-plus unique neighborhoods are arranged in quadrants surrounding the U.S. Capitol, another famous piece of real estate.

The district has seen a 5.9% increase in its median home sale price in the year ending April 2025. The median sales price is now $741,000, according to Redfin.

Who Is Considered a First-Time Homebuyer in Washington, D.C.?

For many of the Washington home mortgage loan assistance programs, you do not have to be a first-time homebuyer. You qualify as long as you do not currently own a home. That said, some of the programs do require that you have not owned a primary home in the past three years, which is the generally recognized definition of a first-time buyer.

Whether or not you’ve owned a home, it’s always a good idea to attend a homebuyer education program. And for some of the programs noted below, attendance is required. Homebuyer education can help all buyers understand how much mortgage they can afford, what fees are involved, and how the lending and closing processes work.

Recommended: First-Time Homebuyer Guide

4 Washington, D.C. Programs for First-Time Homebuyers

The District of Columbia Housing Finance Agency (DCHFA) offers homebuyer and down payment programs to those who meet income and credit requirements and loan maximums.

Let’s take a closer look.

Open Doors Mortgage Program
Open Doors Down Payment Assistance Loan
DC4ME Program for Government Employees
Home Purchase Assistance Program

1. Open Doors Mortgage Program

Qualified first-time and repeat buyers can receive 30-year mortgages at below-market rates for the purchase of a home anywhere in Washington, D.C. You do not have to be a current district resident to apply.

To qualify, borrowers must have a credit score of 640 and an annual income of $275,400 or below. (This is not a household income number; it only applies to the buyer.) The mortgage amount cannot total more than $1,209,750, but there are no purchase price restrictions. Maximum debt-to-income ratios apply.

2. Open Doors Down Payment Assistance Loan

This is a no-interest, no-payment deferred loan used to pay the full amount of your required minimum down payment on an Open Doors primary mortgage. The loan comes due only when the house is sold or transferred, is no longer your principal residence, the mortgage is refinanced, or the 30-year mortgage term is up.

Requirements are the same as Open Doors primary mortgages, listed above.

3. DC4ME Program for Government Employees

The DC4Me program offers full-time D.C. government employees access to a first mortgage at a reduced interest rate and the option of down payment assistance worth 3% of the mortgage in the form of a 0% interest deferred loan.

To qualify, the borrower must be employed by the district, including independent agencies, public charter schools, and any organization that falls under the oversight of the Council of the District of Columbia. Unlike other DCHFA programs, eligible government employees must be a first-time buyer — meaning they do not currently own a home and have not owned a home in the past three years. Borrowers must also complete a home buying education course.

Like the other programs, a credit score of 640 is required. But unlike the other programs, there is a maximum household income (not just the borrower) of $275,400 and a stipulation that the maximum household income not exceed 170% of the area median income. The mortgage loan amount cannot exceed $1,209,750 and the borrower’s debt-to-income ratio may not exceed 50%.

4. Home Purchase Assistance Program

Interest-free loans are for first-time homebuyers (defined as those who have not had an ownership interest in any residential real estate within the three years prior to application). The household income must be within the very low-to-moderate level — up to 110% of area median income.

Borrowers may access up to $202,000 in down payment costs and $4,000 in closing costs as a second, zero-interest loan.

How much you receive and the terms of your repayment depend on your income and household size. For moderate-income households, payments are deferred for the first five years, then are amortized over 40 years. Low-income households will have no monthly payments. All loans are payable in full if you transfer or sell the property, refinance the primary mortgage, or rent out the house.

How to Apply to Washington, D.C. Programs for First-Time Homebuyers

You can find information about qualifications, applications, and requirements for loan programs at the DCHFA website .

You’ll also find a list of approved participating lenders who administer the loans and can help you apply.

It’s 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 help with that process, D.C. Open Doors hosts homebuyer education sessions each month for free as well as free seminars outside of Open Doors.

Federal Programs for First-Time Homebuyers

Several federal government programs are designed for people who have low credit scores or limited cash for a down payment. Although most of these programs are available to repeat homeowners, like state programs, they can be especially helpful to people who are buying a first home or who haven’t owned a home in several years.

The mortgages are generally for single-family homes, two- to four-unit properties that will be owner occupied, approved condos, townhomes, planned unit developments, and some manufactured homes.

Federal Housing Administration (FHA) Loans

The FHA, which is part of the U.S. Department of Housing and Urban Development (HUD), insures mortgages for borrowers with lower credit scores. Homebuyers choose from a list of approved lenders that participate in the FHA loan program. Loans have competitive interest rates and require a down payment of 3.5% of the purchase price for borrowers, who typically need FICO^® credit scores of 580 or higher. Those with scores as low as 500 must put at least 10% down.

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

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

FHA loans always require mortgage insurance: a 1.75% upfront fee and annual premiums for the life of the loan, unless you make a down payment of at least 10%, which allows the removal of mortgage insurance after 11 years. For a $300,000 mortgage balance, upfront MIP would be around $5,250 and monthly MIP, at a rate of 0.55%, would be around $137. You can learn more about these loans, including FHA loans for refinance and rehab of properties, by reading up on FHA requirements, loan limits, and rates.

Freddie Mac Home Possible Mortgages

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

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

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

Fannie Mae HomeReady Mortgages

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

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

Fannie Mae Standard 97 LTV Loan

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

Department of Veterans Affairs (VA) Loans

Eligible active-duty members of the military, veterans, reservists, and surviving spouses may apply for loans backed by the Department of Veterans Affairs. If you think you might be eligible, take time to learn what a VA loan is. It can be used to buy, build, or improve homes. It has a lower interest rate than most other mortgages and doesn’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.

Washington, D.C. First-Time Homebuyer Stats for 2025

• Median home sale price in Washington, D.C.: $741,000

• 3% down payment: $22,230

• 20% down payment: $148,200

• 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): 715

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.

• 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

Washington, D.C., the district that’s neither a city nor a state, has a variety of first-time homebuyer programs for those who meet income and other criteria. Other first-time buyers can look into government-insured and conventional loans on their own to find a good fit.

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FAQ

Should I take first-time homebuyer classes?

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. First-time homebuyer classes can help. Indeed they are required for many government-sponsored loan programs.

Do first-time homebuyers with bad credit qualify for homeownership assistance?

Often they do. Many government and nonprofit homeowner assistance programs are available to people with low credit scores. And often, interest rates and other loan pricing are competitive with those of loans available to borrowers with higher credit scores. That said, almost any lending program has credit qualifications.

Is there a first-time homebuyer tax credit in Washington, D.C.?

No, the mortgage credit certificate program in Washington, D.C. is closed.

Is there a first-time veteran homebuyer assistance program in Washington, D.C.?

The D.C. Housing Finance Agency does not offer specific veteran first-time homebuyer programs, but veterans may find support from the agency’s other housing assistance programs. In addition, district vets may find loans from the federal VA programs listed above.

What credit score do I need for first-time homebuyer assistance in Washington, D.C.?

Applicants for the District of Columbia Housing Finance Agency programs listed above must have a credit score of 640 or above. There are private and federal loan programs that borrowers with lower scores may be able to access.

What is the average age of first-time homebuyers in Washington, D.C.?

There seems to be little data on first-time buyers in Washington, D.C., but the median age nationally is 38.

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