First Time Home Buyers Loans

For the first time, new home buyers get access to the lowest interest rates while exploring financing with FHA home loans for all types of credit. If you plan on buying a house, now is an incredible time because money is cheap and FHA provides flexible loan programs for first time home buyers. Consumers still choose FHA nearly 3 to 1 over conventional financing because of the low down-payment and flexible credit terms. HSH reported that rates on first time homebuyer loans remains between 3 and 4% on the thirty-year term which means you need get approved now and start reaping the benefits.


The 1st time home buyer loan program is an excellent way for non-homeowners to buy a home and keep their new monthly housing payment affordable. With subprime loans taking a hit in the market, many first-time buyers are left with questions about the best options for them. FHA loans may in fact be the answer. While FHA mortgages haven't been as popular in recent years because of the perceived amount of bureaucracy associated with obtaining a loan backed by a government entity such as the HUD, new legislation is in the works to help make them more consumer-friendly. According to recent bank surveys, loan volumes for first time home buyers have risen each of the last three quarters. Now is a great time to get approved for a house loan that actually reduces your housing expenses.

Learn How to Buy a House with Low Credit FHA Loans for First Time Home Buyers!

Our lending services will coordinate first time home buyers with a FHA loan specialist in your specific region. They will help explain the different benefits and costs associated with purchasing your first home with an FHA loan. Many potential homeowners assume they would not qualify to purchase a new home. The FHA reinvented the home loan to help people just like this get approved for their first home loan. The Federal Housing Administration offers home loans to first time home buyers with bad credit, no credit and yes good credit. The interest rates are competitive, and the down-payment requirements are very minimal.

Find Out More About Gift Funds Allowed with Down Payments with First Time Home Buying Loans Insured by the FHA

The Federal Housing Administration enables people to utilize gift-money as part of the down payment requirements. The alternative first-time home loan program endorsed by Fannie Mae does not allow gift funds. Fannie demands that borrowers come up with the total down payment and the underwriter verifies that the money comes from the applicants' personal checking or savings accounts.

Rates for First Time Home Buyers Have Never Been Lower! - Nationwide can you help with find the best new homebuyer loans. FHA designed a home loan to help first timers become homeowners. We take pleasure in helping Americans finance their first home. Consumers like FHA for purchase mortgages because they require very little money down. The other reason FHA mortgages are more popular than ever because homeowners with bad credit can qualify for a loan with a competitive pricing. First time homebuyer rates have also dipped to record lows.

First Time Home Buyer Loans
FHA home loans are like financing angels
for 1st time homebuyers!

FHA Financing Advice for First Time Home Buyer Loans

First of all, it is important to understand that the term "first-time homebuyer" does not necessarily mean only individuals who have never purchased a home before. In actuality, if it has been a number of years since person purchased a home or made a mortgage payment, an individual will likely qualify for a first-time home buyer loan or program. This means that an individual who owned a home a decade ago or so, but who sold it and has rented since then can easily qualify for a first-time home buyer program.

Now, because purchasing a home represents quite a commitment and a substantial investment, first-time buyers would be well advised to take a little bit of time to understand exactly what the market is like and how the average first time home loan works. For example, an individual may find that they have a choice between a 30-year fixed-rate mortgage, a 15-year fixed-rate mortgage, an adjustable rate mortgage, or some combination of these. An adjustable rate mortgage will come with a fixed rate for the first 5 to 7 years, then will adjust according to whatever the market is doing. This is generally not a good option for individuals that are looking to stay at their home for a long period of time. In most cases, a 30-year fixed-rate is the best choice for first time home loans with FHA.

There are a number of benefits that come to homeowners who are purchasing their very first house, not least of which is the fact that there are some impressive tax credits and tax deductions available. Additionally, the FHA has some great options for homebuyers who have credit scores that are a little on the low side. Likewise, the Federal Housing Administration has loans specifically designed to help individuals who cannot afford to put more than 3.5% down and the interest rates are competitive with what the rest of the market is doing.

Shop for New Loans for First Time Home Buyers

When it comes to actually getting a loan, a first-time buyer will find themselves ahead of the game if they take a while to understand exactly what their credit score is and what their credit history looks like before they ever discussed lending options with a bank or other institution. Even if it takes a few months for person to pay down some old debts and get their debt to income ratio into a little bit better shape, a slight delay in home ownership will be a small price to pay compared to the better rates that they will receive.

If the FHA Mortgage Modernization Act actually goes into effect, FHA would be allowed to extend mortgages up to 100% of appraised home value. And the down payment requirement would drop from 3% to (see lender). Most first-time homebuyer loans would be locked into a fixed interest rate with no pre-payment penalties. But in 2018, borrowers are locking into fixed interest rates below 4. When comparing these low-cost fixed rate loans to the adjustable mortgages many of these subprime borrowers are stuck in, you see a stark difference. The FHA is creating an unusual payment shock that is positive, because applicants are surprised at the low interest rates for a change.

More First Time Home Buyers Will Seek FHA Loans This Year Because Of New Mortgage Rules For Fannie And Freddy

Beginning January 1, 2015, new rules will go in effect for Fannie Mae, Freddie Mac, and other traditional home lenders. These rules will substantially tighten lending guidelines by putting in place rules that are designed to ensure that individuals who are getting a home loan will be able to pay it back. These "ability to pay" rules require banks to decline loans to individuals who have a deck to income ratio that is higher than 43%. What this means for the average home buyer is that many individuals will no longer qualify for home loans beginning next year.

Fortunately, that does not necessarily mean that everyone will have to give up on their dream of becoming a homeowner. There are still options available, especially for people searching for first-time home buyer loans.

The FHA and Programs for 1st Time House Buying

The Federal Housing Administration is designed to help individuals purchase a home even if they have a limited credit history or bad credit. Even individuals who have a credit score as low as 500 can qualify for a first-time home loan insured by the FHA, because the be administration does not have the same debt to income limitations that other lenders have. In fact, in many cases there is more flexibility available to individuals who are interested in purchasing their first house through the FHA rather than their local bank, credit union, or some other lender.

HUD has made a proposal that would set a qualified mortgage standard for loans through the FHA that are less strict and severe than other loan brokers, which would allow the agency to continue on its mission to help undeserved borrowers get approved for new home loans for first time buyers.

Qualifying for First Time Buyer Mortgages

What all this means for first-time homebuyers is that many of them are likely to find that the FHA is their best resource when it comes to getting along for their new home rather than going through traditional lending services. Of course, there are those first-time buyers who have adequate credit and a low enough debt to income ratio to qualify for a home loan through their bank or other lending institution. Although the FHA generally requires a lower down payment and has more flexibility, a person who is able to qualify for a more traditional home loan may find that their interest rate is much more favorable if they go through Fannie Mae or Freddie Mac. The most important thing for all first-time homebuyers even mind is that comparison shopping is the best way to ensure that they get the best terms for their new home loan.

All Credit Types on FHA Home Purchase Opportunities

With the new provisions, the FHA loan process would be streamlined and automated in most cases. The legislation's sponsors note that from 1996 to 2005, the subprime market went up 13% to exactly match the decline in FHA originations during that real estate boom. Under the Department of Housing and Urban Development, the Federal Housing Administration is still empowered to take a chance issuing a FHA first time home buyer loan.

Zero-down mortgages have been criticized as stretching borrowers' limits. So, FHA has been requiring a down-payment of 3.5% except in states that allow down-payment assistance on first time homebuyer loans. But the lending sponsors argue that FHA has a superior track record because the underwriting guidelines have a different philosophy that requires more accountability for brokers and mortgage lenders. Most subprime lending that fell into payment default were "stated income" loans, but FHA does require more income documentation. The history of FHA also highlights a significantly lower rate of foreclosure. Learn more about bad credit first-time home buyer loans.

There's also an experimental option for credit granted on the basis of unreported payment histories, for people who have limited or no credit history. Rep. Castle made a recent statement that "while expanding FHA loans likely won't help homeowners already facing foreclosure, they would open the housing market to poorer people who still aspire to buy." He continued that many homeowners are slipping behind on their home loan would be able to now qualify for a home refinance loan sponsored by the government."


Resource Tools

Loan Comparison Calculator
This calculator will help you to compare the total mortgage interest charges of 4 types of first time homebuyer loans.

Did you know that in most cases home mortgage interest is still tax deductible?

Find the best FHA home loan in your state. Get help with first time home loans for people with poor credit. The Federal Housing Administration insures loans for people with limited and bad credit ratings.

Free Finance Guides & Helpful Consumer Reports

Research financing programs with these free guides below that were created to assist 1st time homebuyers finance a home with confidence.

Home Purchase Guide
Understanding Credit Scores
Consumer Guide -Rate Locks

1st Time Homebuyers Rates
In some instance first time home buyers may be eligible for down-payment assistance that provides a source for the funds needed for the required deposit. When shopping loan companies check to see if you meet the eligibility requirements for a 1st time house buyer grant from WISH or CALHFA.

CALHFA Down Payment Assistance Loans in California

Additional FHA Loan Pages:
203K FHA Home Improvement Loans | FHA Streamline Refinance | FHA Home Loans in California | FHA Refinancing with Bad Credit | FHA Loan Requirements | FHA Mortgage Programs | FHA Mortgages for People with a Bad Credit History | First Time Home Buyer with Bad Credit
BD Nationwide Mortgage, 515 Encinitas Blvd. Ste 100, Encinitas, California 92024
Please note that this is not an advertisement for credit. Nothing on this site contains an offer to make a specific home loan for any purpose with any specific terms. This is a web-site and no loans can be guaranteed as programs and rates are subject to change. Copyright © 2001-2018 and Beyond,, All rights reserved. Do not duplicate in any form. The website has no affiliation with the Federal Housing Administration or any other government entity. FHA does not approve all first time home buyer loans.