Who Is Considered a First-Time Homebuyer in Utah?

The answer to that question isn’t as obvious as it seems. For most programs offered in Utah and elsewhere, applicants are considered first-time homebuyers if they haven’t owned a home for the past three years.

Additionally, some programs may make exceptions for veterans, single parents, and others. It’s a good idea to be clear on specific eligibility standards before you start any application.

💡 Quick Tip: Buying a home shouldn’t be aggravating. Online mortgage loan forms can make applying quick and simple.

Other Utah Homebuyer Programs by Location

If you already know which Utah community you hope to make your home, you also may want to research local first-time homebuyer programs. If you can’t find assistance in your chosen location, you may want to check back occasionally for new offers. Some first-time homebuyer programs base their opportunities (and deadlines) on the funds they expect to become available. When their money runs out, they may press pause.

At Home in Layton Down Payment Assistance Program

Layton City offers the At Home in Layton Down Payment Assistance Program to income-eligible first-time homebuyers. The assistance comes in the form of a grant in $10,000 increments that can be used for a down payment, closing costs, or principal reduction. If the purchased home is sold before the end of the fifth year after closing, all or a portion of the grant may have to be repaid to the city.

The next round of funding is set to become available on July 1, 2025. Funds are limited, and applications are accepted on a first-come, first-served basis, so it’s wise to check and see what is available. For more information, you can check out the program’s web page or go to the brochure for application guidelines . Contact the Layton City Community Development Block Grant administrator at 801-336-3770 or [email protected].

Own in Ogden Loan Program

The Own in Ogden loan program provides qualifying first-time and repeat homebuyers with a 0% interest, deferred-payment second loan for their down payment or closing costs. The loan also can be used to reduce the principal on the buyer’s first mortgage. Income and purchase price limits may apply. Please note: At present, the program is accepting applications, but they cannot be funded until July 1, 2025.

•  Homebuyers can receive $10,000 to purchase a primary residence in Ogden.

•  State-certified K-12 classroom teachers or administrators in schools that serve city students can receive a $15,000 loan.

•  Ogden employees and new hires who don’t currently live in the city can receive a loan of up to $15,000 to help them move there .

•  Ogden police officers and firefighters can receive a $20,000 loan.

  Income and purchase limits apply. For more information, you can go to the program’s web page or view the program brochure for application guidelines .

Provo Home Purchase Plus Program

The Provo Home Purchase Plus Program offers eligible homeowners the opportunity to apply for a 0% interest, deferred-payment second loan to help pay their down payment and closing costs. Payment is due in full when the borrower no longer lives in the home as their primary residence. (If the home is sold or vacated within two years of purchase, there may be a $5,000 penalty.)

Income limits, asset limits, credit requirements, and purchase price limits apply, and all household members over 18 must pass a background check. For more information, check out the program’s web page or call 801-852-6162.

Utah County Loan to Own Program

Utah County’s Loan to Own program provides down payment assistance to moderate-income first-time homebuyers in the form of a 0% interest, deferred-payment second loan. This loan is available up to $40,000 currently. The loan must be repaid if the owner vacates or sells the property, and there is a $5,000 penalty if the owner does so within two years of closing.

This program is available countywide except for Eagle Mountain, Alpine, Fairfield, and Provo. Income limits, credit requirements, and purchase price limits apply. You can get more information at the program’s web page or call the Housing Authority at Utah County at 801-373-8333.

How to Apply to Utah Programs for First-Time Homebuyers

If you are interested in any of the above programs for first-time homebuyers in Utah, Follow the links relevant to each program to check what funding is available and find an approved lender or other contact.

Recommended: Understanding Mortgage Basics

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 particularly 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. Here are some details to note:

•   Loans have competitive interest rates and require a down payment of 3.5% of the purchase price from borrowers, who typically need FICO® credit scores of 580 or higher. Those with low credit scores (between 500 and 579) must put at least 10% down.

•   In addition to examining your credit score, lenders will look at your debt-to-income ratio (DTI, which is 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.

•   Using gift money for the down payment is allowed if it’s 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 for the removal of mortgage insurance after 11 years.

Interested in finding out moreJ? 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, visit this Fannie Mae site .

Fannie Mae Standard 97 LTV Loan

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

Department of Veterans Affairs (VA) Loans

Eligible active-duty members of the military, veterans, reservists, and surviving spouses may apply for loans backed by the Department of Veterans Affairs. VA loans, which can be used to buy, build, or improve homes, have lower interest rates than most other mortgages and don’t require a down payment. A few specifics:

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

Native American Veteran Direct Loans (NADLs)

Eligible Native American veterans and their spouses may use these no-down-payment loans to buy, improve, or build a home on federal trust land. Unlike VA loans listed above, the Department of Veterans Affairs is the mortgage lender on NADLs. The VA requires no mortgage insurance, but it does charge a funding fee. Learn more about this mortgage option 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 those in certain professions (such as police officers, firefighters, emergency medical technicians, and teachers) qualify for mortgages in the areas they serve. Borrowers can receive 50% off a home in what HUD calls a “revitalization area.” They must live in the home for at least three years. For more information, visit the HUD program page.

First-Time Homebuyer Stats for 2025

Ever wonder where you fit amid the mix of buyers who are out there shopping for their first home (or the first one in a while)? Here are some stats to check out:

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

Average credit score of a first-time homebuyer in the U.S.: 715

Average credit score in Utah: 730

Median age of a first-time homebuyer: 38

Average home value in Utah: $538,898

3% down payment: $16,167

20% down payment: $107,780

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 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 can take a bite out of 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.

Take note: 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 your 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.

The Takeaway

Utah has an array of state and local assistance programs for low- to moderate-income first-time homebuyers. This can be in the form of help with a down payment, mortgage, and/or closing costs. Other first-time buyers may find an affordable choice among the various federal and commercial mortgages available.

By Kenny Zhu

(Last Updated – 06/2025)

Real estate competition has been brewing in the Buckeye State, just as it has everywhere else.

In June 2025, home prices in Ohio were up 6.0% compared to last year, hitting a $253,300 median price, according to Redfin. Sales prices had the biggest jumps in Chillicothe, Hilliard, and Canton.

Things can look a bit intimidating for first-time Ohio homebuyers. But homeownership may be more accessible than you think.

The Ohio Housing Finance Agency (OHFA) offers a variety of programs to assist low- and moderate-income first-time and repeat homebuyers hoping to achieve homeownership.

4 Ohio Programs for First-Time Homebuyers

OHFA offers four first-time homebuyer assistance programs that can be used in tandem with 30-year fixed-rate FHA, VA, USDA, or conventional mortgage loans.

The benefits from these programs come in the form of down payment assistance, a discounted rate, and a tax credit. Here are the program basics.

1. Your Choice Down Payment Assistance

The OHFA YourChoice! Down Payment Assistance program allows qualifying first-time homebuyers to borrow, in the form of a forgivable loan, 2.5% or 5% of the value of their home purchase to put toward their down payment or closing costs.

OHFA will forgive the assistance after seven years if the homebuyer doesn’t sell or refinance the home. If you sell or refinance your property before seven years are up, you will be required to repay all assistance provided.

2. Ohio Heroes

OHFA offers a discounted mortgage rate for first-time homebuyers in Ohio who work in industries that serve the public interest. Those who qualify for Ohio Heroes benefits are also eligible for the OHFA’s 2.5% to 5% down payment assistance loan.

Qualifying sectors include: veterans, active-duty military and reserve members, and surviving spouses; police officers and professional and volunteer firefighters; EMTs and paramedics; physicians, nurse practitioners, nurses, and state-tested nursing assistants; teachers, administrators, and counselors (preK-12).

Criteria for Ohio Heroes include credit scores of 640 or higher for conventional, USDA and VA Loans, and 650 or higher for FHA Loans. Income limits vary depending on the number of people in your family and whether or not your home is in a target or non-target area.

Qualified buyers must complete a free homebuyer education course with any counseling agency approved by the U.S. Department of Housing and Urban Development (HUD) in Ohio.

3. Grants for Grads

The Grants for Grads program offers a discounted mortgage rate and 2.5% to 5% in down payment assistance, forgivable after five years, for first-time Ohio homebuyers who have obtained a qualifying degree in the 48 months leading up to their loan origination.

Eligible degrees include an associate, bachelor’s, master’s, and doctorate degree. Down payment assistance is forgiven after five years as long as you remain in the state of Ohio. If you sell your home and move out of Ohio within five years, you must repay some or all of the assistance provided.

You may meet the program’s criteria if you have not owned or had ownership interest in a primary residence in at least three years. You must meet income limits according to the number of people in your family and the prospective home’s location in a target or non-target area. Credit score requirements are 640 or higher for conventional, USDA and VA Loans, and 650 or higher for FHA loans.

Qualified buyers must complete a free homebuyer education course with any counseling agency approved by the U.S. Department of Housing and Urban Development (HUD) in Ohio.

4. Mortgage Tax Credit

OHFA offers a mortgage tax credit of 40% of annual mortgage interest paid, up to $2,000, for anyone who qualifies under OHFA’s first-time homebuyer program.

If you use the tax credit with a different mortgage option from your lender, your tax credit percentage will be 20% for a property located in a target area and 15% for other properties.

Note: As of late May 2025, OHFA was not accepting applications for the Mortgage Tax Credit. The program may become available again in July 2025, so check back for updates.

How to Apply to Ohio Programs for First-Time Homebuyers

To participate in OHFA’s first-time homebuyer programs, you’ll need to go through the following steps to find and apply for a loan. Don’t worry; it’s almost exactly the same process as applying for a conventional home loan. The main caveat is that your mortgage lender must work with OHFA.

Step 1: Find a Participating Lender

Not all banks fall under the umbrella of OHFA-approved lenders, but the organization lists participating mortgage lenders on the website. Find a lender working in the target county where you want to buy.

Make sure you find a lender that works in the target county where you’re trying to buy. Most large local financial institutions typically show up as participants in the program.

Getting preapproved for a mortgage will show you the size of the loan, and the interest rate, you’d likely qualify for.

Step 2: Find an Agent and a Home

A real estate agent can help you find a home in your price range and ensure that the property meets OHFA income and sales price limits.

OHFA may offer additional incentives for buyers of homes located in challenged “targeted areas .”

Step 3: Take the Homebuyer Education Course

OHFA requires all first-time homebuyers participating in its programs to complete a free homebuyer education course (the sole exception being mortgage tax credit basic buyers).

You can complete the course directly through the website , free of charge.

Keep in mind that while it’s recommended that you complete the online education course in advance, the homebuyer education isn’t technically complete until after you’ve submitted a formal loan application through your lender.

Step 4: Get an Offer Accepted and Finalize Your Loan Application

Think of all the different types of homes out there, from condo to townhouse and single-family home, your budget, school districts, and wants and needs.

Once you make an offer and the home seller has accepted it, you can move forward with finalizing your mortgage application. Your lender will work with you to coordinate a target closing date and verify that all underwriting and OHFA requirements are met.

Your loan officer will advise you on how final OHFA benefits will be disbursed in accordance with which first-time homebuyer program you qualified for.

Federal Programs for First-Time Homebuyers

The OHFA’s first-time homebuyer program includes perks, but higher earners and others will not qualify. A number of federal government programs exist for people with low credit scores or limited down payment funds. Although they are sometimes for repeat homeowners, these national programs can be very helpful for people who are buying a first home or who haven’t owned a home in several years.

Several federal government programs are designed for people who have low credit scores or limited cash for a down payment.

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 an approved-lenders list of institutions participating 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.

FHA loan limits in 2025 range from $524,225 for single units to $1,008,300 for four-unit properties, with higher limits in high-cost areas.

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 will accept a DTI of up to 57%, 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 without exception require mortgage insurance premiums (MIP): This includes a fee of 1.75% of the base loan amount, usually rolled into the loan, upfront. Borrowers must carry annual premiums for the life of the loan. As of 2025, new homebuyer monthly MIP is 0.15% to 0.75%. With a down payment of at least 10%, the removal of mortgage insurance is possible 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..

Freddie Mac Home Possible Mortgages

Low- and very low-income borrowers may make just 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.

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 members of the military, veterans, reservists, and surviving spouses who are eligible may apply for loans backed by the Department of Veterans Affairs. These loans designed for those who serve our country 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 VA loan advantage is that they do not require 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

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 a “revitalization area.” They must live in the home for at least three years.

Visit the HUD program page for more information.

Ohio First-Time Homebuyer Stats for 2025

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

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

•   Median down payment for first-time homebuyer: 9%

•   Median home price in Ohio: $253,300, according to Redfin

•   Median down payment: $26,000

•   Average credit score in Ohio (vs. average U.S. score of 714): 716

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. In the event of an IRA withdrawal, someone who has not owned a principal residence in the last two years is considered 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. Most plans let you borrow up to 50% of your 401(k) balance, not exceeding $50,000, within a 12-month period without incurring taxes or penalties. You pay interest on the loan, which is paid into your 401(k) account. You usually have to pay back the loan within five years, but if you’re using the money to buy a house, you may have up to 15 years to repay.

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

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

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

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

The Takeaway

If you’re a first-time homebuyer in Ohio, discounted-rate mortgage programs and down payment assistance are available to help make your home purchase more affordable in today’s tough market.If you don’t qualify for those programs, you might want to further investigate government-backed loans and conventional loans.

Who Is Considered a First-Time Homebuyer in Pennsylvania?

According to federal and Pennsylvania housing authorities, a first-time homebuyer is someone who has not owned a primary home in the last three years.

The U.S. Department of Housing and Urban Development (HUD) also considers these groups first-time buyers:

•  A single parent who has only owned a home with a partner while married

•  A displaced homemaker who has only owned a home with a spouse

•  Someone who has owned a principal residence not permanently affixed to a permanent foundation

•  Someone who has only owned a property that wasn’t in compliance with state, local, or model building codes

Keep in mind that veterans and people buying in federally targeted areas often qualify for the same lending advantages as first-time buyers.

Recommended: First-Time Homebuyer Guide

4 Pennsylvania Programs for First-Time Homebuyers

The Pennsylvania Housing Finance Agency offers mortgage loans and down payment and closing cost assistance to first-time and repeat buyers. In general, you should know your FICO® credit score and household income.

And you might have a good idea of how much home you can buy, but getting the details with a home affordability calculator can’t hurt.

1. PHFA: Preferred (Lo MI)

The Pennsylvania Housing Finance Agency offers a conventional 30-year, fixed-rate loan that is designed specifically for housing finance agencies. There is no first-time homebuyer requirement, although there are credit-score and homebuyer education requirements. Borrowers obtaining the HFA Preferred™ loan may qualify to receive a PHFA Grant of $500 to be applied toward down payment and closing costs.

There are household income limits , and you must have an “acceptable” credit history to qualify. You must put down at least $1,000 toward the home and show the ability to make your monthly payments. Pre-closing homebuyer education is required.

Borrowers obtaining an HFA Preferred loan may qualify to receive a Pennsylvania Housing grant of $500 for a down payment and closing costs. To apply, contact a participating lender .

2. PHFA: Keystone Home Loans

This mortgage program does not require you to be a first-time homebuyer, though you need to be purchasing a home in a targeted county (or be a discharged veteran).

To qualify, you must meet household income and purchase price limits. Additionally, you need an “acceptable” credit history and be able to demonstrate that you can afford your mortgage payments.

To see if you qualify, contact a participating lender .

3. PHFA: HOMEstead Down Payment and Closing Cost Loan

This program offers up to $10,000 in down payment and closing cost assistance through a no-interest second mortgage. The loan is forgiven over five years. Buyers participating in the Keystone Home Loan Program are eligible to apply if they meet income and home purchase price limits .

4. PHFA: Keystone Advantage Assistance Loan

Keystone Advantage provides a second mortgage of up to 4% of the purchase price (or $6,000, whichever is less) for the down payment and closing costs. The loan has 0% interest and has monthly payments for 10 years. To qualify, you must have a credit score of 660 or higher. Your liquid assets cannot be more than $50,000 after deducting the funds needed to close on the loan.

5. City and County Programs

It’s a good idea to look into assistance from the city or county where you plan to put down roots. Pennsylvania homebuyers might try an option on this list .

How to Apply to Pennsylvania Programs for First-Time Homebuyers

For the Pennsylvania Housing programs, contact a participating lender to make sure you qualify, start your application, and get guidance on assistance that may pair with your mortgage.

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.

Recommended: The Average Down Payment on a House

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. 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. Get information from the HUD program page.

First-Time Homebuyer Stats for 2025

Here’s some data about Pennsylvania home sales.

•  Median sales price in Pennsylvania: $306,400

•  3% down payment in Pennsylvania: $9,192

•  20% down payment: $61,280

•  Average credit score in Pennsylvania (average U.S. score is 715): 722

Financing Tips for First-Time Homebuyers

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

•  Traditional IRA withdrawals. The IRS lets first-time homebuyers who qualify make 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.

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

•  401(k) loans. If your employer allows borrowing from the 401(k) plan that it sponsors, you may consider taking a loan against the 401(k) account to help finance your home purchase. With most plans, you can borrow up to 50% of your 401(k) balance, up to $50,000 in a 12-month period, without incurring taxes or penalties. You pay interest on the loan, which is paid into your 401(k) account. You usually have to pay back the loan within five years, but if you’re using the money to buy a house, you may have up to 15 years to repay.

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

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

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

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

The Takeaway

In Pennsylvania, first-time homebuyers of moderate means may be able to get a mortgage and down payment assistance through the state or a local agency. Other first-time buyers can shop for an advantageous mortgage on their own.

Who Is Considered a First-Time Homebuyer in Wisconsin?

You are considered a first-time homebuyer in Wisconsin if you’ve never owned a home — or if you haven’t owned a home within the last three years. And, according to the U.S. Department of Housing and Urban Development (HUD), you also qualify as 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.

💡 Quick Tip: SoFi’s Lock and Look ⁺ feature allows you to lock in a low mortgage financing rate for 90 days while you search for the perfect place to call home.

5 Wisconsin Programs for First-Time Homebuyers

There are different types of mortgage loans and financial assistance programs for the first-time homebuyer in Wisconsin and some of them welcome buyers who aren’t purchasing their first home. Some may have income or credit score requirements.

1. WHEDA: Advantage Conventional Loan

The Wisconsin Housing and Economic Development Authority offers the Advantage Conventional Loan . The property you’re buying must be your primary residence for the life of the loan.

To qualify, you must have a credit score of 620 and meet income limits. You will also take a homebuyer education course.

2. WHEDA: Advantage FHA

This program is similar to the Advantage Conventional Loan — but you must have a credit score of at least 640 to qualify. To see if you are eligible, find a WHEDA lender .

3. WHEDA: Easy Close DPA

This down payment assistance program provides at least $1,000 and up to 6% of the purchase price of a home when partnered with a WHEDA Conventional first mortgage loan. It is a 10-year fixed-rate second mortgage with monthly payments.

To qualify, you must meet the income limits that apply to your WHEDA Conventional first mortgage.

4. WHEDA: Capital Access DPA

This down payment assistance program is similar to the Easy Close DPA, with a few notable differences. This is a 30-year 0% interest loan with no payments required. (The loan is paid in full when the first mortgage is paid off.) There are separate income limits, which are generally lower. As of May 1, 2025, the Capital Access DPA program was closed for the year due to funding restraints. Check into the program when you’re ready to buy as funds come and go.

5. City of Madison: Home-Buy the American Dream

Here’s an example of one of the financial assistance programs offered by individual cities in Wisconsin: Madison offers down payment and closing cost assistance in the form of a loan up to $35,000.

The home you’re buying must be in the city of Madison and be a single-family home, condo, or one-half of a duplex.

Payments are deferred until you sell or refinance the property. You are required to invest 1% in the transaction.

Recommended: First-Time Homebuyer Guide

How to Apply to Wisconsin Programs for First-Time Homebuyers

The state programs covered above have different criteria you must meet in order to qualify. Contact a participating lender to find out which programs are right for you.

It may also be helpful to run some numbers using an online mortgage calculator to see how much a loan might cost you. This can also help you think about how much house you can afford.

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.

Worth noting: Those with lower credit scores (in the 500 to 579 range) 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 may allow a DTI ratio of up to 57% in some cases, vs. a typical 45% to 50% maximum for a conventional loan.

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

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

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

💡 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. (Or, if you put down 20% as a down payment, you won’t have to pay any mortgage insurance.)

Fannie Mae HomeReady Mortgages

Fannie Mae HomeReady® Mortgages allow down payments as low as 3% for low-income borrowers and may offer a $2,500 credit to use toward down payment or closing costs for qualified individuals. 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 toward a mortgage 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, though it does have cancellable mortgage insurance. The loan is for just one-unit single-family homes, co-ops, condos, and planned unit developments which you will live in.

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. Find out 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.

Wisconsin First-Time Homebuyer Stats for 2025

Want a better picture of how you stand as a first-time homebuyer? Consider these figures:

•  First-time homebuyers in the U.S.: 24% of all homebuyers

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

•  Median home price in Wisconsin: $328,500

•  Average down payment in Wisconsin: 13%

•  Average credit score of homebuyer in Wisconsin: 738

Financing Tips for First-Time Homebuyers

In addition to federal and state government-sponsored lending programs, there are other financial strategies that teach you how to lower your mortgage payment:

•  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 25 years to repay.

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

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

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

The Takeaway

The housing market in Wisconsin is competitive, but there are programs that can help first-time homebuyers save on a mortgage and down payment costs, as long as they qualify. Federal-backed and conventional loans are also worth exploring.

Who Is Considered a First-Time Homebuyer in Mississippi?

A person who has never owned a home, or who hasn’t owned one in the last three years, qualifies. The U.S. Department of Housing and Urban Development (HUD) also considers the following people first-time homebuyers:

•   A single parent who has only owned a home with a partner while married

•   A displaced homemaker who has only owned a home with a spouse

•   Someone who has owned a principal residence not permanently affixed to a permanent foundation

•   Someone who has only owned a property that wasn’t in compliance with state, local, or model building codes

Recommended: First-Time Homebuyer Guide

3 Mississippi Programs for First-Time Homebuyers

Here are a few of the programs available to the first-time homebuyer in Mississippi. You’ll find some low-interest mortgage loans and down payment assistance options that you may qualify for.

1. MHC: Smart6

A 30-year fixed rate mortgage combined with a $6,000 (and 0% interest) second loan that you can use for your down payment or closing costs is offered through Smart6. Qualifying income and credit score numbers are set by lenders (though in most cases the buyer’s income cannot exceed $132,770) and the purchase price limit on the home is $398,310. The $6,000 second loan is due when the home is sold, the first loan is repaid, or the first loan matures. A similar program, Easy8, comes with an $8,000 second mortgage.

2. MHC: Trusty10

A 30-year fixed rate first mortgage combined with a $6,000, 15-year second mortgage with a 2.00% interest rate. The funds can be used for down payment or closing cost assistance. There are county-specific income guidelines and lender-determined credit score requirements for this second loan.

3. MHC: Housing Assistance for Teachers

If you’re a teacher working in an area where there is a shortage of educators in Mississippi, you may qualify for a special down payment loan. This program provides a 25- or 30-year fixed loan of up to $6,000.

To qualify, you must agree to serve as a teacher for three years in the designated district. And in this case, your loan can be forgiven. Also, you must provide at least 1% of the home’s sale price and one month’s reserves.

How to Apply to Mississippi Programs for First-Time Homebuyers

If you qualify for any of the programs for the first-time homebuyer in Mississippi, contact a participating lender to start your application process. Also, you can use this mortgage calculator to see how much your monthly payments might be.

Recommended: Understanding Mortgage Basics

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. If you think you might qualify, take time to learn what a VA loan is: It can be used to buy, build, or improve a home and has a lower interest rate than most other mortgages. It also 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. For more information, contact [email protected].

US Department of Agriculture (USDA) Loans

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

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

HUD Good Neighbor Next Door Program

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

Mississippi Homebuyer Stats for 2025

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

•   Median age of first-time homebuyers: 38

•   Median home price in Mississippi: $267,000

•   Median down payment for first-time homebuyer: 9%

•   Average credit score in Mississippi: 680

Not sure how much home you can afford? Use this home affordability calculator to find out.

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. After reading up on how to choose a mortgage term, check out these tips on how to lower your mortgage payment:

•  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 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. Mississippi is among a dwindling number of states that still offers the credit; consult a tax advisor as tax policies change regularly.

•  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

Homes in Mississippi are selling fast, but if you’re a first-time buyer in the state, you may be able to take advantage of programs that can offer you a low-interest mortgage and assistance with down payment and closing costs.