Understanding Your Financing Options as a First-Time Buyer

There’s no one-size-fits-all loan when it comes to buying a home—and as a first-time buyer, you actually have several great options that can make purchasing more affordable.

Here’s a breakdown of some of the most common types of home loans available:

1. FHA Loans​

These government-backed loans are ideal for first-time buyers. They allow for lower credit scores and require a down payment as low as 3.5%. FHA loans are popular because they’re more accessible, especially if your credit isn’t perfect.

2. Conventional Loans​

These loans typically require a higher credit score and a down payment of at least 3–5%, but they may have lower mortgage insurance costs over time. If your finances are in good shape, a conventional loan can be a smart long-term option.

3. VA Loans​

If you’re a veteran or active-duty military member, you may qualify for a VA loan—which often requires no down payment and has no mortgage insurance. It’s one of the most generous loan programs available.

4. USDA Loans​

These are for buyers in eligible rural and suburban areas. They offer 100% financing (no down payment required) and are a great option if you’re open to living just outside city limits.

5. First-Time Buyer Assistance Programs​

Many states and local governments offer down payment assistance or grant programs for first-time buyers. Your Realtor and lender can help you identify what you might qualify for.

Pro Tip: Always compare lenders—not all loan officers offer the same rates or programs. Working with someone who’s experienced with first-time buyers is key.