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First-Time Homebuyer Loans: What You Should Know
Updated on March 2025
Table of Contents
At A Glance
- FHA loans are the most common first-time option
- VA and USDA loans offer zero-down eligibility
- Many programs are misunderstood or underused
What is a first-time homebuyer loan?
First-time homebuyer loans are mortgage programs designed to reduce upfront costs and qualification barriers for buyers who haven’t owned a home recently.
- Lower down payments
- Flexible credit requirements
- Assistance with closing costs
FHA Loans
- Down payments as low as 3.5%
- Lower credit score thresholds
- Mortgage insurance required
Best for: Buyers with limited savings or credit history
VA & USDA Loans
VA Loans
- No down payment
- No mortgage insurance
- Military eligibility required
USDA Loans
- Rural/suburban eligibility
- Income limits apply
- No down payment
Common Misconceptions
- You don’t need perfect credit
- You don’t need 20% down
- You may qualify even if you’ve owned before
Common Questions
Who qualifies as a first-time buyer?
Often defined as someone who hasn’t owned a home in the past 3 years.
Can first-time buyers use conventional loans?
Yes—many do.
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