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You don’t have a 20% down payment saved to buy a house?  A first-time home buyer doesn’t need a big down payment.

In today’s competitive housing market, most sellers will not consider an offer if a pre-approval letter is not included.  Begin your home search by contacting a mortgage brokerage to start a pre-approval. They will find out what programs fit your needs, and how much home you can qualify for, before you start your search.

There are over a dozen low- and no-down payment mortgages for first-time buyers, and local housing offices offer eligible buyers access to down-payment assistance programs.

You may even get discounts and deals based on your profession. There are special mortgages for nurses and teachers.  There are also special mortgage programs for first responders, firefighters, and law enforcement.

In some cases, you can buy a home with a $100 down payment.

Mortgage lenders lowered credit score requirements on government-backed loans to make qualifying more accessible. Congress also passed a law that changed how medical debt and credit scores work. The typical home buyer received a 22-point FICO boost.

Affordable Housing Bills can also help, including home buyer tax credits, down payment assistance, and cash grants.

The most popular first-time home buyer discount program: 
Eligible first-time home buyers can access discounted mortgage rates through the First-Time Home Buyer Mortgage Rate Discount program.

The first-time buyer program is available on loans backed by Fannie Mae and Freddie Mac. It lowers mortgage rates in all 50 states for low- to moderate-income buyers with no credit score or down payment requirements.

The program applies to all conventional mortgage loans, including:

  • The 3% down payment program Home Possible
  • The 3% down payment program HomeReady
  • The 3% down payment program Conventional 97
  • Fannie Mae HomePath

It does not apply to the Conventional 100 mortgage, a no-money-down mortgage for first-time buyers.

Other government agencies also made buying a home more affordable.  This includes VA loans for current and past military service, and Rural Housing Loans through the USDA.

The Federal Housing Administration recently reduced its annual mortgage insurance premiums (FHA MIP) by 0.30 percentage points for buyers, lowering monthly payments on FHA-backed loans $300 per year per $100,000 borrowed.

The FHA mortgage insurance premium reduction is the first time the agency lowered FHA mortgage insurance premiums since 2015.

Before making the decision to purchase a home, we recommend you first speak with a qualified mortgage advisor.  They can assist you with tools and knowledge to significantly improve your home buying experience.