What first-time homebuyer programs are available?

The main programs are FHA loans (3.5% down, flexible credit), USDA loans (0% down in rural areas), VA loans (0% down for military/veterans), and state-specific Down Payment Assistance (DPA) programs. DPA programs offer grants or low-interest loans averaging $10,000–$15,000 toward down payment and closing costs.

What are the income limits for first-time homebuyer programs?

Income limits vary by program and location. FHA has no income limits. USDA limits are typically 115% of area median income ($110,650 for most areas). State DPA programs commonly cap income at 80%–120% of area median, which ranges from roughly $60,000 to $140,000 depending on your county.

What is the minimum down payment for first-time buyers?

FHA loans require 3.5% down with a 580+ credit score. Conventional loans start at 3% down (HomeReady/Home Possible programs). USDA and VA loans require 0% down. State DPA programs often provide grants that cover the entire down payment, meaning you could buy with $0 out of pocket.

Should I use an FHA loan or conventional loan as a first-time buyer?

FHA is better if you have a lower credit score (580–679) or need the lowest possible down payment. Conventional is better if your credit is good (680+) — you'll pay less in mortgage insurance and PMI can eventually be removed. Compare both options with a mortgage calculator to see which costs less over your expected time in the home.

First-Time Homebuyer Programs That Actually Save You Money

The average first-time homebuyer using an assistance program receives $10,000 to $15,000 toward down payment and closing costs. That can mean the difference between buying this year or waiting three more years to save. Here are the programs that actually deliver — with real numbers and real eligibility requirements.

The 4 Types of First-Time Homebuyer Programs

1. FHA Loans — The Go-To for Lower Credit Scores

Backed by the Federal Housing Administration, FHA loans require just 3.5% down with a 580+ FICO score (10% down for 500–579). No income limits apply, and debt-to-income ratios can go as high as 50% in some cases. The tradeoff: FHA mortgage insurance (MIP) is more expensive than conventional PMI and lasts the life of the loan if you put less than 10% down.

Down payment: 3.5% (580+ FICO)

Credit minimum: 580 (3.5% down), 500 (10% down)

Upfront MIP: 1.75% of loan amount

Annual MIP: 0.50%–0.55% of balance

Best for: Buyers with credit scores 580–679 or limited savings

2. USDA Loans — 0% Down in Rural and Suburban Areas

USDA loans require $0 down payment and offer below-market rates. Eligibility depends on location (must be in a USDA-eligible area) and income (generally cannot exceed 115% of area median). Many suburban areas qualify — you don't need to live on a farm.

Down payment: $0

Credit minimum: 640 (flexible with compensating factors)

Income limit: 115% of area median (~$110,650 for most households)

Guarantee fee: 1.0% upfront + 0.35% annually

Best for: Buyers in eligible areas with moderate income

3. VA Loans — The Best Deal for Military and Veterans

VA loans are widely considered the best mortgage product available: 0% down, no mortgage insurance, competitive rates, and no minimum credit score (though most lenders want 620). Available to active-duty military, veterans, and eligible surviving spouses.

Down payment: $0

PMI: None — ever

Funding fee: 1.25%–3.3% (waived for disabled veterans)

Best for: All eligible military/veteran buyers — it's almost always the best option

4. State Down Payment Assistance (DPA) Programs

Nearly every state offers DPA programs that provide grants or low-interest loans toward your down payment. These are layered on top of FHA or conventional loans. Here are real examples:

State Program Name Max Assistance

California CalHFA MyHome 3.5% of price or $11,000

Texas My First Texas Home 5% of loan amount

Florida FL Hometown Heroes 5% of loan (up to $35,000)

New York SONYMA DPA $15,000 forgivable

Ohio OHFA YourChoice! 5% of home price

Quick Qualification Comparison

Program Min FICO Min Down Income Limit

FHA 580 3.5% None

USDA 640 0% ~$110K household

VA 620* 0% None

Conventional 620 3% Varies

*VA has no official minimum; most lenders require 620.

Calculate Your Payment Under Any Program

Programs sound great, but what's your actual monthly payment with taxes, insurance, and mortgage insurance? Use our mortgage calculator to run the numbers with different down payments, rates, and loan types. See which program actually costs you less each month and over the life of the loan.

Calculate Your First-Home Payment →