How to Qualify for First Time Home Buyer Programs

Want to know if you qualify for a first-time buyer program? These programs are specifically designed to help first time buyers overcome some of the more common hurdles they may face when buying a home, such as saving up for down payments and closing costs. If you could use a bit of financial assistance to help you purchase your first home, keep reading.

Here’s what you need to know about the first-time buyer programs available to you.



qualify_for_first_time_home_buyer_programs_blog.jpgFirst-Time Buyer Programs offer Down Payment Assistance

One of the biggest roadblocks buyers come across when they want to purchase their first home is saving up a substantial amount of money for a down payment. The U.S. Department of Housing and Urban Development (HUD) provides funds and grants to help first-time buyers who need a bit of financial assistance, in addition to insuring loans that require little or no down payment from first time buyers. Here are some of the options available for you if you want a first-time buyer program that offers assistance with your down payment.

Local Down Payment Assistance Options

Some states and local agencies will offer their own programs to help buyers get into their first home, and your mortgage loan advisor can help you understand the local programs available to you. Here are some examples of local programs available in some of the states American Pacific Mortgage services:


California’s GSFA Platinum Down Payment Assistance Program provides a non-repayable grant up to 5% of the sales price of the home for qualifying buyers to help with down payments and closing costs. Because this program is offered to help low- to moderate- income borrowers, there are income limitations that must be met to qualify.

GSFA Platinum Down Payment Assistance Program qualifying guidelines include:

  • Minimum credit score of 640
  • Not to exceed maximum debt-to-income ratio of 45%
  • Must occupy the home as primary residence
  • Not to exceed income limitations (vary by county)


Washington’s Home Advantage Downpayment Assistance Program offers a 0% interest deferred second mortgage up to 4% of the first mortgage loan amount to be used for down payments and closing costs. The loan is payable within 30 years, or whenever you sell or refinance your home. There is no first time buyer requirement.

This down payment assistance program is combined with the Home Advantage First Mortgage Program, and WA borrowers must meet guidelines such as:

  • Minimum credit score of 620
  • Maximum income limits of $97,000 (statewide)
  • Homebuyer seminar attendance required
  • Not to exceed maximum debt-to-income ratio of 45%
  • Single family homes and manufactured homes in WA


The Colorado Housing and Finance Authority (CHFA) offers a variety of 30-year fixed rate loan options with 3% down payment requirements. An optional CHFA Down Payment Assistance Grant (DPA Grant) is available to help buyers with the 3% down and closing costs. Completion of a homebuyer’s education class is required before the loan closes. The CHFA Advantage program does not require mortgage insurance. Other programs may require reduced cost mortgage insurance for down payments less than 20%.

Colorado borrowers may qualify for one of CHFA loans if they meet guidelines such as:

  • Minimum credit score of 620 (680 required for CHFA Advantage program)
  • Must meet income requirements
  • CHFA approved homebuyer class required
  • Minimum of $1,000 contribution toward home purchase required

These are just a sample of the kinds of programs available to buyers who are purchasing their first homes. Whether you take advantage of a second junior loan to pay for your down payment and closing costs, or are eligible for a grant that doesn’t need to be repaid, there are a variety of options available to borrowers looking to buy their first home.

Ask your mortgage loan advisor about the state and local down payment assistance programs available in your area. While you are discussing first-time buyer programs, you will also want to learn about mortgage loans for first-time buyers, as well.

Mortgage Loan Options for First-time Buyers

First-time homebuyers may want to consider choosing a loan program specifically designed to help get you into a home with a smaller down payment. Many first-time buyers are interested in loan options that allow them to purchase a home with 3.5% down, such as FHA or Fannie Mae loans.

FHA Loans

FHA loans help first-time buyers purchase homes by offering government insured loans with more lenient qualifying guidelines such as lower down payment requirements. If you qualify for an FHA loan, you may be able to put as little as 3.5% down, as well as use gift funds to pay for the reduced down payment amount. To qualify for an FHA loan, borrowers will need to meet guidelines that may include a minimum credit score of 620, a maximum debt-to-income ratio of 45%, and must occupy their home as their primary residence.

Fannie Mae Loans

Fannie Mae offers a program for first-time buyers who want to purchase with a 3% down payment. Fannie Mae’s HomeReady mortgage program has expanded eligibility to help low- and moderate- income borrowers purchase a home. This loan program requires a minimum credit score of 620, that the home be your primary residence, and that you are a first-time buyer. To qualify for a HomeReady mortgage, you will also need to complete a homebuyer education course.

Do I need to be a First-Time Buyer to Qualify?

Many first-time buyer programs require at least one borrower who is a “first-time buyer,” but that doesn’t mean you won’t qualify if you have purchased a home before. The definition of “first-time buyer” generally means a borrower who has not purchased a residential property within the past 3 years. So technically speaking, you could qualify for a first-time buyer program even if you have purchased a home before.

If you think a first-time buyer program is the perfect solution to help you get into your first home, ask your mortgage loan advisor what options are available for you. Whether it is a home loan program with a low-down payment requirement or more lenient qualifying guidelines, or a junior loan or grant to help you pay for a down payment or closing costs, you may be surprised how many solutions are available to you.

Since every loan program or down payment assistance program will have it’s own individual qualifying guidelines, your MORTGAGE LOAN ADVISOR can help you understand which program is right for you.