First-Time Home Buyers
The first mortgage is the hardest. Not because it’s complicated — because no one explains it right.
What This Is
First-time home buyer programs help anyone who hasn’t owned a primary residence in the past three years. Options include FHA with 3.5% down, Conventional 97 at 3% down, zero-down VA and USDA loans, and down payment assistance grants. You don’t need 20% down or perfect credit — just the right program matched to your file.
First-time home buyers are anyone who hasn’t owned a primary residence in the last 3 years. That definition matters — it opens the door to programs and grants specifically designed to get you into your first home with less money down, lower credit requirements, and flexibility on debt-to-income.
Most first-time buyers think they need 20% down and perfect credit. Neither is true. What you need is the right program matched to your file.
Buying in the New Orleans area? Read Buying Your First Home in New Orleans: What to Expect, Step by Step for a plain-English walkthrough of the process, from first call to keys.
Program Options
FHA Loan
- Simple difference
- Government-backed loan with flexible credit and low down payment.
- Who it applies to
- Credit scores as low as 580 (some programs down to 500 with 10% down), higher DTI allowed, past credit issues more forgiving.
- Why it matters
- 3.5% down payment, easier qualification than conventional, seller can pay up to 6% of closing costs.
- Unique details
- Requires mortgage insurance for the life of the loan (or 11 years if 10%+ down). Loan limits vary by county.
Conventional 97 (3% Down)
- Simple difference
- Fannie Mae / Freddie Mac program with just 3% down.
- Who it applies to
- First-time buyers with credit 620+ and reasonable DTI.
- Why it matters
- Lower monthly payment than FHA long-term because PMI drops off at 20% equity.
- Unique details
- Income limits may apply on some versions (HomeReady / HomePossible). Down payment can come from gift funds.
VA Loan (if military/veteran)
- Simple difference
- 0% down loan for eligible veterans, active duty, and surviving spouses.
- Who it applies to
- Anyone with a valid Certificate of Eligibility (COE) from VA service.
- Why it matters
- No down payment required, no monthly mortgage insurance, competitive rates, seller can pay all closing costs.
- Unique details
- One-time VA funding fee (waived for disabled veterans). No loan limits for first-time use if entitlement is full.
USDA Loan (rural areas)
- Simple difference
- 0% down loan for properties in USDA-designated rural areas.
- Who it applies to
- Buyers under income limits, buying in eligible rural/suburban areas.
- Why it matters
- True zero-down financing outside major metros.
- Unique details
- Income cap based on household size and county. Property must be in a USDA-eligible zone (check the map).
Down Payment Assistance (DPA)
- Simple difference
- Grant or forgivable loan that covers down payment and/or closing costs.
- Who it applies to
- Varies by state and program — often first-time buyers under income limits.
- Why it matters
- Can eliminate the down payment barrier entirely when stacked with FHA or conventional.
- Unique details
- Some are grants (never repaid), some are forgivable over time, some are silent seconds. Rules vary state to state.
First-time home buyer programs help anyone who hasn’t owned a primary residence in the past three years. Options include FHA with 3.5% down, Conventional 97 at 3% down, zero-down VA and USDA loans, and down payment assistance grants. You don’t need 20% down or perfect credit — just the right program matched to your file.
First-time home buyers are anyone who hasn’t owned a primary residence in the last 3 years. That definition matters — it opens the door to programs and grants specifically designed to get you into your first home with less money down, lower credit requirements, and flexibility on debt-to-income.
Most first-time buyers think they need 20% down and perfect credit. Neither is true. What you need is the right program matched to your file.
Buying in the New Orleans area? Read Buying Your First Home in New Orleans: What to Expect, Step by Step for a plain-English walkthrough of the process, from first call to keys.
FHA Loan
- Simple difference
- Government-backed loan with flexible credit and low down payment.
- Who it applies to
- Credit scores as low as 580 (some programs down to 500 with 10% down), higher DTI allowed, past credit issues more forgiving.
- Why it matters
- 3.5% down payment, easier qualification than conventional, seller can pay up to 6% of closing costs.
- Unique details
- Requires mortgage insurance for the life of the loan (or 11 years if 10%+ down). Loan limits vary by county.
Conventional 97 (3% Down)
- Simple difference
- Fannie Mae / Freddie Mac program with just 3% down.
- Who it applies to
- First-time buyers with credit 620+ and reasonable DTI.
- Why it matters
- Lower monthly payment than FHA long-term because PMI drops off at 20% equity.
- Unique details
- Income limits may apply on some versions (HomeReady / HomePossible). Down payment can come from gift funds.
VA Loan (if military/veteran)
- Simple difference
- 0% down loan for eligible veterans, active duty, and surviving spouses.
- Who it applies to
- Anyone with a valid Certificate of Eligibility (COE) from VA service.
- Why it matters
- No down payment required, no monthly mortgage insurance, competitive rates, seller can pay all closing costs.
- Unique details
- One-time VA funding fee (waived for disabled veterans). No loan limits for first-time use if entitlement is full.
USDA Loan (rural areas)
- Simple difference
- 0% down loan for properties in USDA-designated rural areas.
- Who it applies to
- Buyers under income limits, buying in eligible rural/suburban areas.
- Why it matters
- True zero-down financing outside major metros.
- Unique details
- Income cap based on household size and county. Property must be in a USDA-eligible zone (check the map).
Down Payment Assistance (DPA)
- Simple difference
- Grant or forgivable loan that covers down payment and/or closing costs.
- Who it applies to
- Varies by state and program — often first-time buyers under income limits.
- Why it matters
- Can eliminate the down payment barrier entirely when stacked with FHA or conventional.
- Unique details
- Some are grants (never repaid), some are forgivable over time, some are silent seconds. Rules vary state to state.
- 01Free 30-minute call. Tell me your situation, goals, timeline.
- 02Pre-approval. Pull credit, review income, structure the right program. You get a real pre-approval letter, not a “pre-qualification.”
- 03Shop with confidence. Your agent knows exactly what price range works.
- 04Offer accepted. I lock the rate, order the appraisal, coordinate with your title company.
- 05Underwriting. I front-load documents so surprises are minimal. Weekly updates from me either way.
- 06Clear to close. Final walkthrough, closing disclosure review, sign day.
- 07Keys in your hand. First payment usually about 30–45 days out.
Standard first-time buyer documentation:
- Photo ID (driver’s license, passport)
- Social Security card
- Last 2 years W-2s
- Last 2 pay stubs
- Last 2 months bank statements (all accounts)
- Last 2 years tax returns (if self-employed or complex income)
- Gift letter (if any of the down payment is gifted)
- Divorce decree, bankruptcy discharge, or other legal docs (if applicable)
- Landlord contact info or last 12 months rent history
Not needed until later: appraisal (I order), title work (title company does), homeowners insurance (you shop once under contract).
| Program | Min Credit | Min Down | Max DTI | Notes |
|---|---|---|---|---|
| FHA | 580 (500 w/ 10% down) | 3.5% | 57% | Requires MIP for life of loan |
| Conventional 97 | 620 | 3% | 50% | PMI drops at 20% equity |
| VA | 580 typical | 0% | 55% | COE required, veterans only |
| USDA | 640 | 0% | 46% | Rural areas + income limits |
| DPA (varies) | 620–660 | 0–3.5% | 50% | State/county specific |
Different situations call for different lender strengths. Through my network, I can access programs that specialize in:
- FHA down to 500 credit (most lenders stop at 580)
- Conventional loans with down payment fully gifted from family
- DPA stacked with FHA for near-zero out of pocket
- VA loans with $0 lender fees for veterans
- Manual underwriting FHA for buyers with unique credit history
- Non-traditional credit files (thin credit, first credit account)
- Bank statement / 1099 programs for self-employed first-timers
No 20% down, no perfect credit required — just the right program for your file. Get pre-approved and I’ll come back with a real number and a plan.