The cost of a home can be prohibitive, especially for a first-time homebuyer. You might have a steady job and a good amount of money saved for a down payment, but you might still be facing an uphill climb. The government wants to be there to help people with their climb because it is good for the economy. Here are some excellent government assisted programs for first-time homebuyers that might be just right for you and your situation.

What is the definition of a first-time homebuyer?

-          An individual who hasn’t owned a primary residence three years from the date they intend to purchase a home.

-          A single parent who only owned a home with a former spouse.

-          A homemaker who only owned a home with a spouse.

-          An individual who only owned a residence not permanently attached to a foundation, such as an RV, tent, or mobile home unit.

-          An individual who has had a property that didn’t comply with state or local codes


What government programs can I qualify for as a first-time homebuyer?

 HUD-Related programs

The U.S. Department of Housing and Urban Development gives money to organizations that assist first-time homebuyers. For instance, they have a program called the Good Neighbor Next Door can support teachers, firefighters, law enforcement officers, and emergency medical technicians get into homes as a first-time homebuyer. They have vast resources to help homebuyers, so talk to your real estate professional or lender for more information.

State-Specific Assistance

The HUD or federal government aren’t the only ones offering first-time homebuyer assistance. Some states like Illinois, Ohio or Washington also have down payment assistance programs for first-time buyers. The requirements vary by state, but usually, the aid will help with down payment or closing costs. Talk to your real estate professional for more details and conditions for the programs.

Military Benefits

Active and veteran families might qualify for a zero down payment program. If a borrower qualifies for a   VA loan, they not only get a chance to have no down payment but get the benefit of not having to pay mortgage insurance, which most no down payment programs require.

Loans for Native Americans

There are some programs available for any Native American first-time homebuyers. The government has a loan called a Section 184 loan which allows Native American’s to buy a home for as little as 2.25% for home loan above $50,000 and 1.24% for a loan below $50,000. Instead of using a buyer’s credit score, loans for Native American’s depend more on the market rate. Please note that a Section 184 loan requires that the loan is only for a single-family loan that is a buyer’s primary residence.

Retirement Fund

You might think that your retirement fund should remain untouched until you are retired, and in most cases that is a good idea. The government, however, looks at a home as a good investment, so allow you to withdraw up to $10,000 for first-time homebuyers without penalizing them the 10% early withdrawal fee. Withdrawing the money doesn’t come without penalty, however. You should expect to pay the income tax on any money taken out as well.

It is in the best interests of the government to help first-time homebuyers get into a home. Make sure you have all the information when it comes to programs that can help you on your way to home ownership.