you’re a first-time homebuyer in the USA, there are several mortgage options designed to make buying your first home more affordable and accessible — especially if you have limited savings or a lower credit score.
🏠 Top Mortgage Options for First-Time Homebuyers in the U.S.
1. FHA Loan (Federal Housing Administration)
- Down Payment: As low as 3.5%
- Credit Score: Minimum of 580 (or 500 with 10% down)
- Pros:
- Easier to qualify
- Allows lower credit scores
- Cons:
- Requires mortgage insurance (MIP), regardless of down payment
2. Conventional Loan (with First-Time Buyer Programs)
- Down Payment: As low as 3% through Fannie Mae’s HomeReady or Freddie Mac’s Home Possible
- Credit Score: Typically 620+
- Pros:
- Cancel PMI (private mortgage insurance) once you reach 20% equity
- Better rates for good credit
- Cons:
- Stricter credit/income requirements than FHA
3. VA Loan (for Veterans, Active Military, or Eligible Spouses)
- Down Payment: 0%
- Credit Score: No official minimum, but most lenders prefer 620+
- Pros:
- No down payment
- No private mortgage insurance (PMI)
- Competitive interest rates
- Cons:
- Must meet VA eligibility requirements
4. USDA Loan (U.S. Department of Agriculture)
- Down Payment: 0%
- Credit Score: Generally 640+
- Pros:
- For low- to moderate-income buyers in rural or suburban areas
- Low rates, no down payment
- Cons:
- Property and income must meet USDA limits
5. State & Local First-Time Buyer Programs
Many states offer:
- Down payment or closing cost assistance
- Forgivable loans or grants
- Reduced-rate mortgages
🗺️ You can search for programs by state at:
👉 HUD State Directory
🔍 First-Time Buyer Tips
- Get pre-approved to know your budget.
- Check your credit report and improve your score before applying.
- Compare lenders — don’t just go with your bank.
- Budget beyond the mortgage: property taxes, insurance, maintenance, etc.
- Take a homebuyer education course — sometimes required for certain loans and helps with budgeting and expectations.