By Walecia Konrad

(Last Updated – 03/2024)

It’s a long journey through the 440-mile length of Tennessee. That’s why the Volunteer State is divided into three Grand Divisions — East Tennessee, Middle Tennessee, and West Tennessee — each with a unique personality and real estate market.

East Tennessee is square in the Appalachian Mountains and is home to Knoxville and Chattanooga, the state’s third- and fourth-largest cities. The rolling hills of the middle area are anchored by Nashville, Tennessee’s largest city and the capital. The western division slides into the flatlands of the Mississippi River and is home to the inimitable Memphis.

Home prices in Tennessee rose 5.1% between February 2023 and 2024, hitting a median price of $368,100, according to Redfin. That’s a large number but still more affordable than in many other states. Plus, Tennessee offers a robust first-time homeowner assistance program for mortgages and down payments.

4 Tennessee Programs for First-Time Homebuyers

First-time homebuyers can find help through the Tennessee Housing Development Agency’s Home Loan Program. Down payment assistance is also part of the agency’s menu. Here’s a closer look.

1. Great Choice Home Loan Program

This program offers conventional, FHA, VA, or USDA 30-year fixed-rate loans to first-time homebuyers. Interest rates vary based on the market and the mortgage lender. Down payment assistance is available for FHA or USDA loans.

To qualify, borrowers need to make a 3% down payment for conventional loans and a 3.5% down payment for FHA or USDA loans. Income and purchase price limits apply, depending on the county and household size. Buyers who are not first-timers are also able to participate in this program if they are qualified military buyers or are buying in certain targeted areas.

The housing agency requires a minimum FICO^® credit score of 640 for everyone on the loan application and completion of a home education course.

2. Homeownership for Heroes

Available to active military service members including the National Guard, as well as veterans, law enforcement officers, EMTs, paramedics, and firefighters this program provides for a 30-year loan at reduced interest rate.

Applicants must have a minimum credit score of 640, meet the same income and purchase price limits as in the Great Choice program, and complete a homebuyer education course if using down payment assistance. They may, though, borrow up to 100% of a home’s purchase price with a loan backed by the Department of Veterans Affairs.

3. Great Choice Plus: Help With a Down Payment or Closing Costs

This is Tennessee Housing’s down payment assistance program, to be used with the Great Choice mortgages. There are two options. The deferred option offers a forgivable second mortgage for $6,000 to be used for down payment or closing costs. The loan has a 0% interest rate, and payments are deferred until the end of the 30-year term, at which time the loan is forgiven. If you refinance or sell, the loan is due in full.

The amortizing option provides 6% of the sales price to be used for down payment or closing costs. This second mortgage is repaid in monthly payments over 30 years at an interest rate that is the same as your first mortgage rate.

Borrower requirements are the same as they are for the Great Choice Program.

4. Local First-Time Homebuyer Programs

Local housing initiatives may offer help with down payments, closing costs, and other assistance for first-time buyers in certain areas. The City of Clarksville, for example, has a program for first-time homebuyers.

Recommended: Understanding the Different Types of Mortgage Loans

How to Apply to Tennessee Programs for First-Time Homebuyers

The Tennessee Housing Development Agency website contains clear descriptions and requirements for its mortgage and down payment assistance programs available to first-time homebuyers in the state. The agency does not lend directly, but you can find a list of approved lenders so you can compare interest rates, fees, and other costs. This is particularly important for newbie homebuyers, who may be unfamiliar with the process.

First-time buyers can also find links to approved homebuyer education courses , which are required for participation in most of its programs.

Homebuyer education classes can help buyers understand how much mortgage they can afford and what monthly payments they can expect.

In addition, the THDA website provides a list of approved credit counselors who may be able to help potential borrowers who fall below the required credit score of 640.

Federal Programs for First-Time Homebuyers

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

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

Federal Housing Administration (FHA) Loans

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

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

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

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

Freddie Mac Home Possible Mortgages

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

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

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

Fannie Mae HomeReady Mortgages

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

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

Fannie Mae Standard 97 LTV Loan

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

Department of Veterans Affairs (VA) Loans

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 positive aspect 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.

First-Time Homebuyer Stats for 2024

•   Median home sale price in Tennessee: $368,100

•   3% down payment: $11,043

•   20% down payment: $73,620

•   Percentage of buyers nationwide who are first-time buyers: 32%

•   Median age of first-time homebuyers: 35

•   Average credit score (vs. average U.S. score of 714): 705

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.

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 $199,200 or below. (This is not a household income number; it only applies to the buyer.) The mortgage amount cannot total more than $766,550, 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 $199,200. The mortgage loan amount cannot exceed $766,550 and the borrower’s debt-to-income ratio may not exceed 50%.

4. Home Purchase Assistance Program

Interest-free loans are prioritized for low-income, elderly, handicapped, disabled, or displaced borrowers. First-time homebuyers (those who have not owned a home in the past three years) may access up to $80,000 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.

Recommended: Understanding the Different Types of Mortgage Loans

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 two 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 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

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.

Washington, D.C. First-Time Homebuyer Stats for 2024

•   Median home sale price in Washington, D.C.: $590,000

•   3% down payment: $17,700

•   20% down payment: $118,000

•   Percentage of buyers nationwide who are first-time buyers: 32%

•   Median age of first-time homebuyers: 35

•   Average credit score (vs. average U.S. score of 714): 715

By Susan Guillory

(Last Updated – 03/2024)

People are drawn to the Cowboy State for its wide open spaces, mountains, rivers, and small towns. Home prices in Wyoming were up 17.7% year-over-year as of February 2024. The number of homes sold rose 6.8%, according to Redfin. Meanwhile, Zillow reports that the median home value is $334,782.

If Wyoming is calling (howling?) your name, know that there are state programs that may help with the cost of a purchase. If you’re a first-time buyer or it has been a while, this home buying guide will serve as a flashlight in the dark.

6 Wyoming Programs for First-Time Homebuyers

The Wyoming Community Development Authority (WCDA) is the main source of homeownership help for low- to moderate-income buyers in Wyoming. It has a number of loan programs that can be paired with down payment assistance.

1. WCDA First-Time Homebuyer Program

The program offers first-time buyers an FHA, VA, or USDA 30-year loan with a low fixed interest rate. Borrowers must meet purchase price and income limits and must complete a homebuyer education class.

2. WCDA Spruce Up

Spruce Up offers first-time homebuyers a low-interest 30-year loan for both the purchase and rehabilitation of a home. Applicants must meet the First-Time Homebuyer Program requirements.

3. WCDA Advantage & HFA Preferred

The Advantage and HFA Preferred programs, for both first-time buyers and current homeowners, both provide a 30-year fixed-rate mortgage with no home purchase price limit. The home being purchased must sit on 10 or fewer acres.

You will need a credit score of at least 620 and meet income limits, as well as occupy the residence for at least one year. First-time buyers are required to complete homebuyer education.

4. WCDA Down Payment Assistance

The 0% HomeStretch loan for a down payment or closing costs may be used with the First-Time Homebuyer and Spruce Up programs. There are no monthly payments on the loan of up to $15,000, which is due upon the sale of the home, refinance, or 30-year maturity.

Borrowers must have a credit score of at least 620 and contribute $1,500 or more to their purchase, although this money can be a gift. A 10-year amortizing down payment assistance loan may be used with the Advantage and HFA Preferred programs. It requires low monthly payments.

5. WCDA Mortgage Credit Certificate

HFA Preferred and Advantage borrowers who are first-time buyers may take a credit of up to $2,000 toward federal income tax based on mortgage interest paid. Borrowers may use the credit over the life of the loan, as long as they continue to qualify.

The borrower may be subject to Federal Recapture Tax, though they may be reimbursed by the WCDA.

6. Welcome Home Wyoming

The Welcome Home Wyoming program provides 30-year fixed-rate loans and up to 5% down payment or closing cost assistance. Participants must have lender-qualifying credit and meet income limits.

How to Apply to Wyoming Programs for First-Time Homebuyers

As you start to explore different types of mortgage loans, be sure to review the programs discussed for the first-time homebuyer in Wyoming. If you qualify, you could save on your loan or get help with the down payment.

For any of the WCDA offerings, find a participating lender to get started.

To find a lender that participates in the Welcome Home Wyoming program, visit this site .

Federal Programs for First-Time Homebuyers

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

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

Federal Housing Administration (FHA) Loans

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

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

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

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

Freddie Mac Home Possible Mortgages

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

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

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

Fannie Mae HomeReady Mortgages

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

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

Fannie Mae Standard 97 LTV Loan

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

Department of Veterans Affairs (VA) Loans

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. To contact the Wyoming HUD office, call 307-261-6250.

First-Time Homebuyer Stats for 2024

•   Median home sale price in Wyoming: $334,782

•   3% down payment: $10,043

•   20% down payment: $66,956

•   Percentage of buyers nationwide who are first-time buyers: 32%

•   Median age of first-time homebuyers: 35

•   Average credit score (vs. average U.S. score of 714): 724

By Walecia Konrad

(Last Updated – 03/2024)

The Gem State’s relatively affordable and attractive housing has been luring both local first-time homebuyers and residents from nearby high-cost states like California for years. In February 2024 home prices were up 8.4% year-over-year with the median home price hitting $484,100, according to Redfin.

The decline of available properties for sale continues to fuel demand in Idaho. The number of homes for sale dropped close to 20% year over year. To find your footing when you’re working with a tight budget in this competitive market, it helps to be familiar with the programs available to first-time homebuyers in Idaho.

4 Idaho Programs for First-Time Homebuyers

Let’s take a closer look at many of the first-time homebuyer programs available in Idaho, including those that welcome buyers who have low incomes, limited down payments, and less-than-stellar credit scores. If you aren’t sure where you want to settle in the state, consider looking in one of the best affordable places to live in Idaho.

The Idaho Housing and Finance Association is a private mortgage lending institution that administers affordable housing resources in Idaho, including first-time and repeat buyer down payment assistance programs and conventional and government-insured mortgages for low-income homebuyers. Examples include:

1. Idaho Housing First Loan

These FHA, VA, or USDA loans are available for homebuyers who earn less than $150,000. Completing a homebuyer education course is mandatory for most Idaho Housing First Loan borrowers. Prospective borrowers are asked to connect with a Idaho Housing preferred lender to learn more.

2. Idaho Heroes Loan

Teachers, firefighters, nurses, paramedics, EMTs, law enforcement officers, military members, and veterans can qualify for the low-interest Idaho Heroes second mortgage at a rate that is 0.125% lower than standard down payment assistance. The minimum borrower contribution is also waived. To check eligibility for this program, the first step is to find a lender .

3. Idaho Down Payment Assistance Programs

Idaho Housing and Finance provides homebuyers up to 10% of the sales price of the home to use for a down payment and/or closing costs. Idahoans who use this program can contribute as little as 0.5% of the sales price of their own funds to the purchase. The down payment assistance funds are loaned via either a second mortgage or a forgivable, zero-interest loan.This program is available to qualified buyers with a household income under $150,000, even if they are not first-time homebuyers.

Recommended: How Much Is a Down Payment on a House?

4. Idaho Mortgage Credit Certificate

Idaho’s mortgage credit certificate (MCC) allows homebuyers to claim a credit on their federal taxes for 35% of the mortgage interest they pay each year, up to the federal limit of $2,000 each year.

Borrowers must live in the home and meet certain income requirements based on the county, sales price limits, loan type, and first-time homebuyer status. They may use any additional interest paid for the federal mortgage interest tax deduction if they itemize. Lenders can help buyers determine if they are eligible for the credit. (More information on MCCs is below.)

Who Is Considered a First-Time Homebuyer in Idaho?

In Idaho, first-time homebuyers are considered those who haven’t owned a primary home in the past three years. (For married couples, if either spouse meets the test, they are considered first-time homebuyers, according to the federal definition. Also included are single parents who owned a home with a former spouse, and displaced homemakers who owned a home with a spouse.)

First-time homebuyer assistance almost always applies to a primary residence only. Investment properties and second homes usually do not qualify. To apply for many (but not all) of the first-time homebuyer programs in Idaho, residents must take a course, which includes information about mortgage programs, managing your credit score, determining how much house you can afford, applying for a mortgage loan, and closing.

If a home buying course is required, best to take it early in the process. In some cases, you won’t be able to close on the house until you’ve shown proof of attendance.

Recommended: Do You Qualify as a First-Time Home Buyer?

How to Apply to Idaho Programs for First-Time Homebuyers

The best way for Idaho residents to get more information about what loans and grants are available is to visit the Idaho Housing and Finance Association website.

Once you’ve determined which programs may be a good fit for you, you’ll want to estimate how much you can afford in mortgage payments and then compare lenders. It’s important for first-time homebuyers, who may be unfamiliar with the mortgage borrowing process, to compare several lenders’ requirements, rates, and terms to make sure they’re getting the best loan available for their financial situation.

Recommended: Understanding the Different Types of Mortgage Loans

Federal Programs for First-Time Homebuyers

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

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

Federal Housing Administration (FHA) Loans

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

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

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

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

Freddie Mac Home Possible Mortgages

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

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

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

Fannie Mae HomeReady Mortgages

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

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

Fannie Mae Standard 97 LTV Loan

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

Department of Veterans Affairs (VA) Loans

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 that are guaranteed by the USDA in specified rural areas. Borrowers must also meet USDA income requirements. Mortgage insurance is paid with upfront and annual fees. Eligible properties are listed by region on the USDA website . The Idaho USDA rural program guide can help you determine if you’re eligible for USDA assistance.

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.

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 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, without incurring taxes or penalties. You pay interest on the loan, which is paid into your 401(k) account. You usually have to pay back the loan within five years, but if you’re using the money to buy a house, you may have up to 15 years to repay.

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

•  The mortgage credit certificate program. First-time homeowners and those who buy in targeted areas can claim a portion of their mortgage interest as a tax credit, up to $2,000. Any additional interest paid can still be used as an itemized deduction. To qualify for the credit, you must be a first-time homebuyer, live in the home, and meet income and purchase price requirements, which vary by state. If you refinance, the credit disappears, and if you sell the house before nine years, you may have to pay some of the tax credit back. There are fees associated with applying for and receiving the mortgage credit certificate that vary by state. Often the savings from the lifetime of the credit can outweigh these fees.

•  Your employer. Your employer may offer access to lower-cost lenders and real estate agents in your area, as well as home buying education courses.

•  Your lender. Always ask your lender about any first-time homebuyer grant or down payment assistance programs available from government, nonprofit, and community organizations in your area.

The Takeaway

First-time homebuyers in Idaho have options to make a home purchase more accessible and affordable. Idaho programs in hand with federal government lending initiatives may help prospective homeowners participate in this vibrant real estate market.

By Susan Guillory

(Last Updated – 03/2024)

The Green Mountain State is a nature lover’s paradise with forests, lakes, and mountains and in the past year it has been popular with homebuyers as well. The number of homes sold increased 14.2% between February 2023 and 2024. Prices were up 6.5% as well, according to Redfin, hitting a median price of $361,300.

The good news is, if you’re a first time home buyer in Vermont, there are state and federal programs to help you purchase your home. This home buying guide can help walk you through the process.

5 Vermont Programs for First-Time Homebuyers

There are several state programs for the first time home buyer in Vermont. Many are designed for people with low incomes or those who don’t have good credit scores. The Vermont Housing Finance Agency (VHFA) offers a number of them.

1. VHFA: MOVE and MOVE MCC

The MOVE program offers first-time homebuyers 30-year, fixed-rate mortgage loans with low down payments. To qualify, you must meet purchase price and income limits and have a minimum credit score of 640-680. At least one member of the purchase household must take a homebuyer education course. The MCC program provides for an income tax credit of up to $2,000.

2. VHFA: ADVANTAGE

The Advantage program is a low-interest 30-year loan for candidates who do not qualify for MOVE and MOVE MCC. There is no first-time homebuyer requirement unless buyers are using a VHFA down payment assistance program.

3. VHFA: ASSIST Down Payment and Closing Cost Assistance

VHFA’s ASSIST program offers a 0% interest loan with no monthly payments due on sale to help with down payment and closing costs, with a maximum loan amount of either $10,000 or $15,000 (based on income). To qualify, borrowers and non-borrowing spouses must be first-time homebuyers with combined assets of less than $30,000.

4. VHFA: Mortgage Credit Certificate (MCC)

VHFA’s Mortgage Credit Certificate (MCC) provides a Federal tax credit up to $2,000 for every year you live in your home and pay interest on the mortgage. This is available with the MOVE MCC program as well as non-VHFA mortgages.

5. Champlain Housing Trust (CHT)

If you’re interested in a home in Northwest Vermont, check out the Champlain Housing Trust (CHT) Shared Equity Program. It helps low- and moderate-income homebuyers purchase enables people to buy a home without a down payment and with a reduced mortgage. In order to qualify, you must fall into a certain income range; cannot own another home or have significant assets outside of retirement savings. You’ll have to pay the closing costs, and when you sell the home you sell it back through the trust to another qualified buyer.

Recommended: First-Time Homebuyer Guide

How to Apply to Vermont Programs for First-Time Homebuyers

You can choose from many types of mortgage loans. You can also apply to the programs we’ve discussed for the first-time home buyer in Vermont. Just be sure to check the requirements before applying. Many ask you to connect with a partnering lender to apply for the 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, 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

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. You can reach the Burlington Field Office of HUD at 802-951-6290.

First-Time Homebuyer Stats for 2024

•   Median home sale price in Vermont: $361,300

•   3% down payment: $10,839

•   20% down payment: $72,260

•   Percentage of buyers nationwide who are first-time buyers: 32%

•   Median age of first-time homebuyers: 35

•   Average credit score (vs. average U.S. score of 714): 737