10 First Time Home Buyer Programs and Grants

Buying a home with limited funding is not an easy task, especially given the state of today’s economy. This is where first time home buyer programs come in; they’re the perfect way to help most people achieve "The Great American Dream" of owning their own homes.

At Cher, we bring you one step closer to becoming a homeowner with advice from experts, loan information, and our co-ownership matching service. Here’s our guide to first time home buyer programs to help you get familiar with financing options.

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What is a Home Buyer Program?

First-time homebuyer programs are supported by government agencies that help prospective homebuyers procure financial assistance to purchase their home. These programs help them find low-interest mortgage rates when they are unable to secure them anywhere else.

The government supporting these loans ensure that the eligible qualifications for these programs are not as strict as conventional home loan financing options.

Fortunately, there are many first-time homebuyer programs and grants available to prospective homebuyers in the market.

Here are some programs to check out:

Program by HUD

Visit the HUD website to learn more about the various first-time buyer grants that are available in your state. For more information on first-time homebuyer programs and down payment assistance programs, you can visit your local county website. Various states and counties offer different kinds of homebuyer assistance programs. They provide grants for financial assistance on down payments and closing costs.

Check out Cher for assistance to help you become a homeowner.

FHA Home Loan Program

One of the best options for first time home buyers is the FHA loans, which have flexible guidelines for qualification, especially when compared to a conventional home loan.

Ideally, to obtain this loan, it is recommended that one improve their credit scores before applying for a mortgage. As hard as it may be to believe, the down payment comes down to as much as the amount that is equivalent to the gift from family and friends. That means the down payment for an FHA loan can be a gift from a family member or friend.

USDA Loans

A rural home where co-owners are applicable for a USDA Loan.

This is a home loan program offered by the Department of Agriculture, targeted at low-to-moderate-income home buyers in rural parts of the nation. Check the list of USDA eligible locations and other criteria to see if you and your fellow co-owners qualify for this loan option.

Note that almost 97% of the land in the USA is eligible in the USDA location. The USDA mortgages are designed for first-time homebuyers because there is absolutely no down payment required at all. The mortgage insurance (MIP) for USDA loans are also cheaper than those of FHA loans by half a percent.

VA Loans

Offering a buyer program for active and retired vets, the Veterans Administration gives VA loans without any down payments. This reduces the upfront costs associated with getting a mortgage. For eligible recipients, the VA loan is the cheapest mortgage available because no mortgage insurance is required. Therefore, this makes VA home loans perfect for any cash-strapped first-time home buyer who fits the necessary requirements.

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203K Rehab Loans

A 203K Rehab loan is like an extension of the main FHA loan program. It gives first time home buyers funds to purchase a home and cash to renovate it with a single loan, making it ideal for people buying single-family homes that are in desperate need of repair. The requirements for this loan are relatively similar to the standard FHA loan, with only a difference in the credit score requirement.

Conventional 97% LTV 3% Down Program

A conventional 97% mortgage allows the borrower to put a low down-payment of just 3% while making their first home purchase. As with FHA loans, this makes it easier for homeowners to save up and even get a little bit of assistance from a friend or family member.

Good Neighbor Next Door Program

A first-time homebuyer and teacher in her classroom.

A first-time homebuyer program by HUD provides homes at 50% off for firefighters, teachers, and police officers. All that is required is a measly $100 down payment for this great program. Visit the HUDHomeStore website to check for available properties in any area.

Check out Cher to find your co-owning partner and browse financing options together.

HUD Dollar Home Program

The Department of Housing and Urban Development (HUD) sells foreclosed FHA homes that have been up on the HUD website for a period longer than six months. Local Governments often offer homes to low-income families and revitalize the community.

Note: You can view the list of eligible HUD homes on the HUD website.

HomeReady HomePath Mortgage

This mortgage program is exclusively tailored to the needs of first-time home buyers. The buyers can take the required educational course, where they can receive 3% towards closing costs on a mortgage loan. Therefore, a low down-payment of only 3% is needed, which is even less than FHA loans.

Native American Direct Loan

The Native American Direct Loan (NADL) allows eligible indigenous Americans to purchase the available property on recognized trusted land. These individuals need to have a valid Certificate of Eligibility from the Veteran’s Administration Property and must reside on a federally recognized trust or Alaska Native corporations. NADL is for owner-occupants only and does not apply to investment properties.

You can check out Cher to find out how to co-own your first home.

Which is Right for Me?

Two co-homeowners discuss financing options.

This is a question that a real estate advisor can go a long way in helping you answer. Reach out to one through an online resource with all the required information such as your credit score, the home you’re looking to buy, the grants or programs you think would cover the expenses, and so on.

Once you have gathered all the necessary documents, you can check out Cher to get matched with qualified co-borrowers, calculate your loan, and start buying your first home.

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