First Time Buyer Benefits

Home Mortgage Affordability, A gray house, brown card and calcul

There are perks to being a first time homebuyer. There are many down payment assistance programs and low cost loans available to first time homebuyers.  One thing many buyers don’t realize is that if you have not owned a home in three years, you are considered a first time buyer!

One of the benefits is low down payments. This can apply to those that meet income guidelines and have owned a home recently. There are conventional loans with a 3% down payment for first time homebuyers. If your income is at or under 80% of the median income limit, you do not need to be a first time homebuyer for the 3% down payment. You can also get a lower interest rate and mortgage insurance. Right now, there is lower interest rates for all first time homebuyers that are under 100% of the median income. If you are using FHA financing, your down payment is 3.5%. If you qualify for VA financing or USDA financing, you can buy with zero down. FHA, VA and USDA do not require that you are a first time homebuyer.

Down payment assistance is also available to many first time homebuyers. There are different programs depending on where you are buying. In Minnesota, the big program is MN Housing and they offer down payment assistance between $11,500 and $17,000. Depending on your income, you may have to pay it back when you sell or you may have a monthly payment to pay it back over the first ten years. Either way, it can help you get into a home. There are also special programs in other areas. If you are buying in Bloomington, you can get $10,500 and you do not need to be a first time homebuyer. Eden Prairie and Woodbury have programs offering  up to $25,000 in assistance. St Paul has a program and the assistance varies based on your needs. All of these require a first time homebuyer class that can be done online or in person.

Lower mortgage insurance can be an option if your income is under 80% of the median income in your area. This applies with Home Ready or Home Possible conventional loan programs. Depending on your credit score and number of people on the loan, your MI may be significantly lower using these programs.

So where do you find out about these programs? Ask your loan officer and if they are not aware of any programs, reach out to me. You can also check with your local housing finance agency, they may be aware of programs. Sometimes a google search is a good way to find out, but it may not be up to date with current information.

Right now interest rates are all over the place, but trending downward. However once the spring market hits, we could see the housing market get a bit crazy again. No one knows for sure but if you find a home you like now, it can be a great time to buy!

Leslie Vanderwerf,  NMLS ID#335509, CrossCountry Mortgage LLC, An Equal Housing Lender, NMLS#3029 – Email – Website


Written By

Currently a Senior Loan Officer at Cross Country Mortgage LLC, it's hard to believe I have been in the mortgage business for more than 25 years and have worked with Sharlene since 2000! I love sharing mortgage insights here each week and helping people finance their homes. Listening helps me find the right program for you!

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