Overview of First Time Home Buyer Programs

First time home buyer programs offer tax incentives, down payment assistance, and financing options for buyers with less than perfect credit. Not all programs are available to first time buyers and each requires applicants to meet eligibility requirements. Buyers can conduct online research or consult with a mortgage adviser to determine which program is best suited for their needs.

The most popular first time home buyer programs include FHA loans, HUD houses, VA loans, Fannie Mae financing, and Making Home Affordable; a government sponsored program offering mortgage refinance and home loan modifications.

In addition to perks and incentives of home buying programs, first time home owners can also take advantage of the Worker, Homeownership and Business Assistance Act that extends an $8,000 tax credit for primary residence real estate purchases made by April 30, 2010. The Recovery Act also provides up to $6500 tax credit to homeowners who have lived in their home for five or more years and ready to step up to a higher priced home.

The Department of Housing and Urban Development provides an assortment of first time home buyers programs. Although HUD programs differ by state most offer the opportunity to buy HUD homes at substantially discounted prices.

HUD offers the ‘Good Neighbor Next Door’ program to individuals employed in teaching, law enforcement, and public service professions such as paramedics and firefighters. HUD good neighbor incentives include buying houses up to half off real estate listing prices.

The Federal Housing Administration offers home loan financing opportunities for first time home buyers with low FICO scores and credit blemishes. Borrowers who have inconsistent employment histories or those who have previously filed bankruptcy sometimes find it easier to qualify for FHA loans.

Currently, the down payment requirement for FHA loans is 3-1/2 percent. FHA allows borrowers to obtain down payment monies from an outside source such as a gift or loan from friends, family or a charitable organization. The Federal Housing Administration is the only home loan program that allows down payment assistance from a third party.

The Department of Veterans Affairs provides first time home buyer programs to veterans and active duty personnel. The VA guarantees up to 25-percent of home mortgage loans which helps veterans obtain financing through a conventional mortgage lender. First time home buyer programs, tax incentives and mortgage assistance information can be found at VA.gov.

Fannie Mae provides first time home buying programs and refinance mortgages options. One popular program is Home Path®. This home buying program provides a mixture of homes for sale. Home Path properties include foreclosure homes which are sold at discounted prices through Fannie Mae approved realtors.

Additional home buying incentives offered through Fannie Mae programs include no appraisal fees, low down payment requirement, flexible mortgage terms, and home loan financing for people with bad credit. First time home buyer and mortgage refinance programs can be found at FannieMae.com.