By Walecia Konrad

(Last Updated – 03/2024)

Florida’s fast-growing population, robust job growth, and new industries all make for a hot real estate market. Home prices increased 3.5% to an average value of $388,454 vs. the national average of $342,941 (rising 3.1%), according to Zillow.

For those who are looking to break into the housing market, there’s help available. For those who qualify, the state offers programs to assist with down payment, mortgage, and closing costs. Here, take a look at some of the options available.

Florida Programs for First-Time Homebuyers

The Florida Housing Finance Corporation offers first-time buyers a variety of assistance programs which typically include homebuyer education classes. This can help buyers understand how much mortgage they can afford and how the lending and closing processes work.

Here are details regarding the programs.

1. Florida First

This program offers 30-year fixed-rate FHA, VA, and USDA government-backed loans as well as conventional loans that can be paired with Florida Housing’s down payment assistance second mortgages. (See below for details.)

The housing finance agency conventional loans may have lower mortgage insurance premiums than the federal government loans. Single-family homes, townhomes, approved condos, two- to four-unit homes with the buyer residing in one of the units, modular homes, and mobile homes are allowed.

Buyers must have a credit score of at least 640 and meet the income and purchase price limits in the county where the home is located.

2. Florida Assist Second Mortgage

This program offers up to $10,000 for down payment and closing costs via a 0% interest deferred second mortgage to be used only with a Florida Housing first mortgage.

The second loan is not forgivable, but repayment is deferred until the home is sold, the borrower moves, or the first mortgage is refinanced. Borrowers must meet the same requirements as they do for the Florida First mortgage.

3. HFA Preferred and HFA Advantage Plus Second Mortgage

These forgivable second mortgages allow participants to borrow 3%, 4%, or 5% of the total loan amount for down payment and closing costs. There are no payments, and the loan is forgiven at 20% a year over a five-year term.

4. FL HLP Second Mortgage

The Florida Homeownership Loan Program (FL HLP) offers a loan up to $10,000 for down payment and closing costs with a 3% interest rate. The loan is paid over a 15-year term, unless the borrower moves, sells, or refinances, at which time the loan must be paid back in full.

Because there is a monthly payment associated with this loan, it will be considered in an applicant’s debt-to-income ratio when applying for a first mortgage.

5. Local Homebuyer Assistance Programs

The Hometown Heroes program supports community workers such as law enforcement officers, firefighters, EMTs, educators, health care professionals, and child care operators or employees can receive up to 5% of the first mortgage amount (up to $35,000) in down payment and closing cost assistance if they are first-time homebuyers who meet income and purchase price limits and have a credit score of at least 640.

Military members and veterans are also eligible, and are exempt from the first-time homebuyer requirement.

The assistance takes the form of a 0% interest, 30-year deferred second mortgage that must be repaid if the borrower sells the home, moves, or refinances the first mortgage.

Hometown Heroes can also offer lower-than-market rates on an FHA, VA, USDA, Fannie Mae or Freddie Mac first mortgage and reduced upfront fees.

6. Local Homebuyer Programs

There are some city and area-specific homebuyer programs in areas such as Jacksonville that help first-time buyers in Florida. Be sure to check with the county, city, and local home advocacy organizations where you are buying for other assistance opportunities. The U.S. Department of Housing and Urban Development (HUD) lists contacts by state, region, and county .

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Who Is Considered a First-Time Homebuyer in Florida?

The Florida Housing Finance Corporation is a 40-year-old state agency that provides affordable housing opportunities to first-time and low- to moderate-income homebuyers looking for their place in the Sunshine State.

It considers anyone who has not owned a primary home in the past three years a first-time homebuyer.

In some targeted areas of the state, repeat buyers may also apply for first-time homebuyer programs. And typically veterans need not be first-time buyers.

Recommended: Understanding the Different Types of Mortgage Loans

How to Apply to Florida Programs for First-Time Homebuyers

The Florida Housing website includes the Homebuyer Loan Program Wizard , an interactive tool that can help you determine your eligibility for Florida first-time homebuyer programs. Florida Housing is not a lender, but the Wizard tool provides a list of approved lenders by location.

It is especially important for first-time buyers, who may be unfamiliar with the mortgage lending process, to compare interest rates, fees, and other costs among lenders to find the most affordable loan. A first-time homebuyer guide can also be helpful in providing a foundation for your property pursuits.

Federal Programs for First-Time Homebuyers

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

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

If you qualify for one of these loans through Florida Housing, that’s advantageous. If not, you can apply for them on your own. Notice that the credit score requirement could be higher with Florida Housing.

Federal Housing Administration (FHA) Loans

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

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

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

FHA loans always require mortgage insurance: a 1.75% upfront fee and annual premiums for the life of the loan, unless you make a down payment of at least 10%, which allows the removal of mortgage insurance after 11 years. Here’s an example:

•   For a $300,000 mortgage balance, upfront MIP would be around $5,250 and monthly MIP, at a rate of 0.55%, would be around $137.

You can learn more about these loans, including FHA loans for refinance and rehab of properties, by reading up on FHA requirements, loan limits, and rates.

Freddie Mac Home Possible Mortgages

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

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

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

Fannie Mae HomeReady Mortgages

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

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

Fannie Mae Standard 97 LTV Loan

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

Department of Veterans Affairs (VA) Loans

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.

💡 Quick Tip: A VA loan can make home buying simple for qualified borrowers. Because the VA guarantees a portion of the loan, you could skip a down payment. Plus, you could qualify for lower interest rates, enjoy lower closing costs, and even bypass mortgage insurance.†

Native American Veteran Direct Loans (NADLs)

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

US Department of Agriculture (USDA) Loans

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

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

HUD Good Neighbor Next Door Program

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

Florida First-Time Homebuyer Stats for 2024

Here’s a snapshot of Florida homebuyers:

•  Median home value: $388,454

•  3% down payment: $11,653.62

•  20% down payment: $77,690.80

•  Average credit score (vs. 714 nationwide): 689

Who Is Considered a First-Time Homebuyer in Iowa?

The IFA defines a first-time homebuyer as someone who has not owned a primary residence in the past three years. This conforms with the federal definition cited by the U.S. Department of Housing and Urban Development (HUD).

Keep in mind that there are exceptions for veterans, as well as those seeking to purchase a home in targeted areas under the IFA’s FirstHome program.

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5 Iowa Programs for First-Time Homebuyers

The IFA offers two major homebuyer assistance programs geared toward helping both repeat and first-time homebuyers. Benefits are offered in the form of competitive mortgage rates, grants, and deferred loans.

You can use the IFA’s eligibility checker to see whether you qualify for benefits.

1. FirstHome Program

The FirstHome Program offers below-market interest rates on mortgages that may require just 3% down and may include reduced mortgage insurance.

The mortgage can be paired with a FirstHome grant or second mortgage.

While eligibility for FirstHome program benefits are generally limited to first-time homebuyers, active-duty military personnel and veterans may be able to skip this requirement, as well as buyers of homes in targeted disadvantaged areas.

•   Household income limit: Generally should not exceed $132,710, but the limit varies by county.

•   Home purchase price limit: $481,000 for non-targeted areas; $588,000 in targeted areas.

•   Primary residence: Buyer must intend to occupy home as primary residence within 60 days of closing.

•   Minimum FICO^® credit score: 640

•   Debt-to-income (DTI) ratio: cannot exceed 50%

A homebuyer education course is required for borrowers taking out conventional loans, which will help participants understand the whole buying process and types of mortgage loans.

2. Homes for Iowans

First-time and repeat homebuyers who obtain a mortgage under the Homes for Iowans program will face lower mortgage fees and credit score does not impact the interest rate.

The program has more liberal home price and household income limits than FirstHome.

•   Household income limit: Generally should not exceed $161,650

•   Home purchase price limit: $588,000

•   Primary residence: Buyer must intend to occupy home as primary residence within 60 days of closing.

•   Minimum FICO^® credit score: 640 (with options for those without credit scores)

•   Debt-to-income (DTI) ratio: cannot exceed 50%

3. Down Payment and Closing Costs Programs

The IFA’s two mortgage programs can be married with down payment and closing costs programs . Specifically, borrowers may qualify for either a $2,500 grant or a loan of up to 5% of the purchase price (repayable if the home is sold or refinanced, or the first mortgage is paid off) to help with a down payment or closing costs.

Eligibility requirements for both the FirstHome and Homes for Iowans down payment assistance programs include income and home purchase price limits.

Your lender will help you qualify for the grant or loan as part of your application process.

4. Military Down Payment Program

This program offers a $5,000 grant to eligible homebuyers to cover a down payment and closing costs. The Military Homeownership Assistance is geared toward veterans, active-duty service members, and surviving spouses using a FirstHome or Homes for Iowans mortgage.

The program is subject to funding availability, so it’s a good idea to ask your mortgage lender to check whether the funding status of either program has changed.

5. Local Assistance

City and county programs also exist that boost homeownership. Check the list kept by HUD.

How to Apply to Iowa Programs for First-Time Homebuyers

Above, there are links to the programs mentioned so you can learn more about eligibility. Regardless of which IFA program you pick, you’ll need to make sure you contact an approved mortgage lender to start your loan application.

Once your lender has verified that you meet the minimum program requirements, you may be asked to complete a homebuyer education course. Homebuyer education is required for all conventional mortgage loans and must be completed before closing.

Your mortgage lender will guide you through the necessary steps to take until you’re ready to close.

Recommended: Guide to First-Time Home Buying

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 US 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. Here are details on this 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 (between 500 and 579) 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 some 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.

◦   Example: For a $300,000 mortgage balance, upfront MIP would be around $5,250 and monthly MIP, at a rate of 0.55%, would be around $137.

You can learn more about these loans, including FHA loans for refinance and rehab of properties, by reading up on FHA requirements, loan limits, and rates.

💡 Quick Tip: Backed by the Federal Housing Administration (FHA), FHA loans provide those with a fair credit score the opportunity to buy a home. They’re a great option for first-time homebuyers.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; 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 website .

HUD Good Neighbor Next Door Program

Police officers, firefighters, emergency medical technicians, and teachers can get help qualifying for mortgages in the areas they serve with the HUD Good Neighbor Next Door Program . 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.

Iowa First-Time Homebuyer Stats for 2024

Here’s a snapshot of Iowa homebuyers:

•   Median home value: $205,988

•   Change year over year: 3.3%

•   3% down payment: $6,179.64

•   20% down payment: $41,197.60

•   Average credit score (vs. 714 nationwide): 711

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. The IRS considers anyone who has not owned a primary residence in the past three 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 cut into 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, 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.

•  The mortgage credit certificate program. First-time homeowners and those who buy in targeted areas in Iowa may qualify to claim a portion of their mortgage interest as a tax credit, up to 50% of the interest paid at a $2,000 cap. However, funding is not available as of this writing. It can be wise to check if the Iowa mortgage credit certificate gets additional funding when you are ready to purchase a property.

•  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

First-time homebuyers in Iowa may qualify for down payment, mortgage, and closing costs assistance through a state or local program. Other first-time buyers can look into the array of available mortgages as well to find the right fit.

By Walecia Konrad

(Last Updated – 03/2024)

If you’re house hunting in California, you don’t need anyone to tell you it’s pricey.

The average home value in the state is currently $750,709, up 4.4% year over year, vs. the national average of $342,941, up 3.1%, according to Zillow.

Fortunately, California has an active first-time homebuyer assistance program, and there are federal and other programs that can provide a helping hand, too. This can help make owning a piece of the Golden State a reality instead of just a dream.

7 California Programs for First-Time Homebuyers

The California Housing Finance Agency (CalHFA) offers both conventional and government-backed first mortgages. Down payment and/or closing cost assistance is available in many of the programs.

For all of the loans listed below, buyers must have a minimum credit score of 640, 660, or 680, depending on certain factors, and meet income limits . Homebuyer education counseling is required by one occupying household member.

California Housing mortgages can be used for single-family homes, condominiums, planned unit developments, manufactured housing, and in some cases guesthouses and accessory dwelling units.

Here’s a closer look at the agency’s programs for a first-time homebuyer.

1. CalHFA FHA Loan

This program offers a 30-year fixed-rate mortgage to first-time buyers. The CalHFA FHA loan can be combined with the CalHFA down payment assistance programs. In addition to the requirements listed above, debt-to-income limits may apply.

2. CalPLUS FHA Loan

The CalPLUS FHA loan is a 30-year fixed-rate FHA loan with a slightly higher interest rate than the FHA loan listed above but can be paired with CalHFA Zero Interest Program (ZIP) closing cost assistance.

3. CalHFA VA Loan

The CalHFA VA loan is a 30-year fixed-rate VA mortgage available to veterans who can show a valid certificate of eligibility. Borrower requirements may differ slightly from the CalFHA programs; qualifying veterans may need to make no down payment.

4. CalHFA USDA Loan

The CalHFA USDA loan is a 30-year fixed-rate mortgage loan guaranteed by the USDA. It can be combined with the MyHome down payment assistance program for first-time homebuyers. The USDA has its own income limits, which may be more restrictive than CalHFA limits. (See below for more information on USDA loans.)

5. CalHFA Conventional Loan

The CalHFA Conventional loan is a 30-year fixed-rate loan insured through private mortgage insurance instead of the government. Buyers must meet the same requirements as CalHFA government-backed loans listed above.

6. CalPLUS Conventional Loan

The CalPLUS Conventional loan is a 30-year fixed-rate loan that has a slightly higher interest rate than a CalHFA conventional loan. It can be paired with CalHFA ZIP program to help cover closing costs.

7. MyHome Down Payment Assistance

The MyHome program works with CalHFA government and conventional first mortgages. Borrowers of government-backed mortgages can apply for a junior loan of up to 3.5% of the home purchase price (or the appraised value, whichever is less) to help with down payment and closing costs. Payments are deferred until you sell the home, refinance your mortgage, or pay your mortgage in full.

Conventional loan borrowers may be eligible for a MyHome loan as well. But in this case the junior loan is up to 3% of the home purchase price (or appraised value, whichever is less).

Recommended: First-Time Homebuyer Guide

How to Apply to California Programs for First-Time Homebuyers

The California Housing Finance Agency website provides details on each of its mortgage, down payment, and closing costs programs. Also on the website is an interactive tool that buyers can use to determine if they are eligible for CalHFA programs and if so, which program might best suit their situation.

The agency does not lend directly, but does list participating lenders . 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 find the most affordable loan.

Recommended: Understanding the Different Types of Mortgage Loans

Federal Programs for First-Time Homebuyers

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

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

Federal Housing Administration (FHA) Loans

The FHA, which is part of the U.S. Department of Housing and Urban Development (HUD), insures mortgages for borrowers with lower credit scores. Homebuyers choose from a list of approved lenders that participate in the FHA loan program.

•   Loans have competitive interest rates and require a down payment of 3.5% of the purchase price for borrowers, who typically need FICO® credit scores of 580 or higher. Those with lower credit scores (as low as 500) must put at least 10% down.

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

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

•   FHA loans always require mortgage insurance: a 1.75% upfront fee and annual premiums for the life of the loan, unless you make a down payment of at least 10%, which allows the removal of mortgage insurance after 11 years.

◦   Here’s an example: For a $300,000 mortgage balance, upfront MIP would be around $5,250 and monthly MIP, at a rate of 0.55%, would be around $137.

You can learn more about these loans, including FHA loans for refinance and rehab of properties, by reading up on FHA requirements, loan limits, and rates.

Freddie Mac Home Possible Mortgages

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

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

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

Fannie Mae HomeReady Mortgages

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

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

Fannie Mae Standard 97 LTV Loan

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

Department of Veterans Affairs (VA) Loans

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. Additional points to know:

•   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%.

•   These 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: Active duty service members who have served for at least 90 consecutive days are eligible for a VA loan. But so are many veterans, surviving spouses, and National Guard and Reserves members. It’s worth exploring with an online VA loan application because the low interest rates and other advantages of this loan can’t be beat.†

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. (Contact them at [email protected].) 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 can help 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.

California First-Time Homebuyer Stats for 2024

This is a snapshot of the recent home buying experience in California.

•  Median home sale price: $750,709

•  3% down payment: $22,521.27

•  20% down payment: $150,141.80

•  Average credit score (vs. 714 nationwide): 709