Posted by Amanda Bruen on 12/26/2017

Whether you’re a first-time homebuyer or someone who has previously owned a home at some point in their life, you most likely know how expensive buying a house can be.

Fortunately, there are many organizations who would agree and who seek to help qualified buyers. There are a number of programs available at the state, local, and federal level designed to help certain buyers purchase a home.

There are also a number of myths around these programs, such as what the term “first-time homebuyer” really means.

In this article, we’ll talk about some of the programs you can look into to get help paying for a home.

Who Qualifies as a First-Time homebuyer?

Contrary to what it sounds like, you can still qualify as a first-time homebuyer if you’ve owned a home in the past. The Federal Housing Administration (FHA) has been helping people achieve their goal of homeownership since the 1930s. The FHA connects first-time homebuyers with lenders if the buyer meets certain criteria. Those criteria are:

  • Someone who hasn’t owned a home in the time previous three years. This includes spouses.

  • A single parent who previously owned a home with a former spouse, or a “displaced homemaker” who has only owned a home a former spouse.

  • People who have only owned homes that didn’t meet building code or a residence not fixed to a foundation.

The way the FHA helps buyers secure an affordable home loan is by insuring the mortgage. This makes it safer for lenders to approve you for a better rate for your home loan.

Veteran, Rural, and Native American Loan Programs

Aside from FHA loans, you might also qualify for a VA loan, a USDA program, or the Section 184 Indian Home Loan program.

VA loans from the U.S. Department of Veteran Affairs help veterans secure low-interest loans with affordable down payments. They will also help repeat veteran home buyers who have had financial difficulties in the past such as foreclosure and bankruptcy.

The Section 184 Indian Home Loan Guarantee Program works similarly to an FHA loan in that the federal government insures the loan so that the buyer can receive a better rate and lower down payment.

This program is designed for American Indian and Alaska Native families. However, not every state is eligible for the loan.

The United States Department of Agriculture is another federal department that offers mortgage assistance. You don’t need to be a farmer or have agricultural aspirations to be approved for a USDA loan. Rather, these loans are designed to help develop rural areas by offering loans with no down payments.

State, Local, and Private Programs

Each state in the United States offers various buyer’s assistance and incentive programs. Be on the lookout for programs specific to your area to find low-interest rates and affordable down payments.

Fannie Mae, Freddie Mac, and other companies work with lenders to create affordable lending programs throughout the country. Remember to shop carefully when dealing with private lenders and look out for hidden costs.