How To Qualify as a First Time Home Buyer

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Qualify as a First Time Home Buyer

Many may think homeownership is nearly impossible, but it may not be as far from your reach as you think. If you aren’t sure how to qualify as a first-time home buyer, then the first thing you should know is: Being a first-time homebuyer includes some nice perks that make it a lot easier to purchase a home.

How do I qualify?

If you’ve never purchased a home before, then you automatically qualify as a first-time buyer — but here’s something you might not know: you can be a first-time home buyer more than once. This is one instance in which time is on your side.

There’s a ton of misperception about what it takes to qualify. Most people are confused by income levels, they think they earn too much, or they don’t realize that they could have purchased a home before to qualify.  

If you haven’t owned a home in the past three years, you can apply for a mortgage as a first-time buyer.

Why would I want to qualify as a first-time homebuyer?

There are major advantages of being a first-time buyer, including a number of nationwide programs and incentives geared toward first-time buyers that make homeownership more accessible. For example, both conventional and FHA loans offer first-time buyers the opportunity to purchase a home with only 3% down (conventional) or 3.5% down (FHA).

If you haven’t saved don’t a lot of cash and you are a veteran or looking for a home outside a large metropolitan area, you may qualify for a no-down payment loan, such as a VA or USDA loan. VA loans offer great interest rates and less strident qualifications. However, these loans are only available to current military members or veterans and their spouses.

USDA Rural Development loans allow 100% financing (or 0% down). Don’t let the name fool you, areas designated for Rural Development loans can be closer to cities than you might expect.

One of the key eligibility factors is an area’s population size rather than the amount of rural land surrounding a house. Two big advantages to the USDA loan program are the ability to secure a low fixed interest rate with a very low down payment, even for borrowers with limited income and less than perfect credit.

Don’t forget to do your research and ask plenty of questions when talking to lenders and your real estate agent about local and state first-time buyer programs. Many offer down payment grants, no-down-payment mortgages, and low interest rates. We are here to help with any questions you may have.

State programs vary, of course, but they provide another exciting opportunity for first-time home buyers to investigate.

For example, the District of Columbia provides several first time home buyer programs including DC4ME for District government employees and DC Open Doors. Maryland’s largest first time home buyer program is the Maryland Mortgage Program.

Down Payment Assistance

How much do you need for a down payment?

It depends on the program.

Having enough cash on hand is one of the biggest hurdles for homeownership. But just because you don’t have a lump sum of cash in a savings account, that doesn’t automatically disqualify you from purchasing a home.

First-time buyers are eligible for some really incredible programs that will lower your down payment amount.

For a conventional loan, qualifying borrowers may only have to have a 3% down payment. You’ll need to put 3.5% down for FHA loans.

There are a number of down payment programs specifically for first-time buyers. Some are grants and some are loans; some will match your down payment amount up to a certain percentage, while others offer a flat lump sum to anyone who completes the program.

It’s a really good idea to look into which programs are available in your state … otherwise, you could be bypassing free money to supplement your down payment.

5 down payment assistance myths

The Bottom Line

Despite the name, you don’t actually have to be buying your very first home to qualify as a first-time buyer. A snowed above, qualifying as a first-time homebuyer comes with some major advantages.

Finding a lender with excellent service is key. When shopping for a mortgage as a first-time buyer, most people focus solely on the numbers. But, make sure you choose a lender who is going to guide and advise you throughout the process. If the lender you’re considering is responsive, proactive, and pleasant to work with, that’s a good sign! Contact us for any assistance on finding a lender.

DC Open Doors Approved lenders

Working with a real estate agent you trust is also critical for first time buyers. Working with an agent who knows the local market inside and out will work to your advantage. It’s not unusual for a lender to call agents, either, looking for buyers who may qualify for new opportunities that have recently become available. Make sure your lines of communication are open and honest — and don’t be afraid to ask questions — and you’ll be even closer to qualifying as a first-time homebuyer and finding your first home.

Get a jumpstart! Complete the Buyer Questionnaire and get a copy of the first time home buyer checklist.

5 Items You Need To Qualify For a Home Loan

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About Dana Ash-McGinty 172 Articles
Dana Ash-McGinty is the Principal Broker of ASH | MCGINTY, a Washington, DC Real Estate Brokerage. This real estate maven has 15+ years experience in residential, commercial and land sales in addition to multi-state residential renovation, re-zoning, and condo conversion projects. A sought after real estate authority, she has been featured on CNN and in various real estate and financial publications. Dana is married to the highly esteemed Dr. Dana W. McGinty, a Washington, DC based internal medicine physician. They are often referred to as "The Danas".

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