First-Time Homebuyer Loans

First-Time Homebuyer Programs

There are many first-time homebuyer loan programs. The programs offer a low-down payment and forgiveness for lower credit scores in the form of reduced interest rates and monthly mortgage insurance premiums. Eligible buyers can combine a low-down payment first mortgage down payment assistance (DPA) as a second mortgage.  The cost of purchasing a home can seem overwhelming. These programs help deserving people achieve homeownership and the opportunity to grow equity in a primary residence without waiting to save for a sizeable down payment and closing costs.   

Let’s look at some of the programs.

Conventional Low-Down Payment

Today’s buyers have more opportunities to put less than 20% down.  Fannie Mae and Freddie Mac offer a 3% down payment option for first-time homebuyers. The program allows credit-worthy buyers to have the ability to put down as little as 3% of the purchase price. This program allows:

  • At least one buyer must be a first-time homebuyer
  • A minimum of 3% down payment
  • Primary residence purchase
  • Fixed-rate mortgages only

HomeReady and Home Possible Programs

Fannie Mae and Freddie Mac offer these low-down payment programs. Both loan programs allow for credit flexibility for low to median-income buyers. The program is designed to provide lower rates and mortgage insurance premiums to those needing credit flexibility and a low-down payment. The programs offer as little as a 3% down payment and have these benefits:

  • Flexible down payment sources
  • Lower interest rates than other low-down payment programs
  • Lower monthly PMI premiums
  • Allow down payment assistance programs
  • Have income restrictions to be eligible for the programs

FHA Home Loans

An FHA home loan is one of the most accessible loans to qualify for. An FHA mortgage may be a good e option for borrowers not eligible for conventional financing. The FHA loan program is insured by the Federal Housing Administration and offers a 3.5% down payment.  The benefits are:

  • 580 minimum credit score with a 3.5% down payment
  • Higher debt-to-income ratios allowed than conventional loans
  • Lower interest rates than conventional loans normally
  • No income limits
  • First-time buyer status not required
  • Property types allowed are single-family homes, townhomes, 2-4 family homes, manufactured homes, and condos.

Zero Down Payment Programs

The zero down payment programs are government-insured mortgage programs including, VA and USDA (Rural Development) loan programs.

Information and programs are subject to change without notice. Not an offer to lend. All applicants must be credit approved. Not all applicants are approved or are eligible for a program. CharterStone Mortgage is not affiliated with any government agency. 

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