What are the eligibility requirements for first-time buyer home loans?

What would you do if you no longer had to rent an apartment and instead could purchase a home right now, with no money down and minimal up-front costs? Buying a home is much more attainable today than it was years ago. Gone are the days when you had to toil day and night to scrimp and save your pennies so you could afford that required 20% down payment for a new home for you and your family.

Now, there are first-time buyer home loans with both no-money-down and low-down-payment options available to homebuyers, whether you are backed by the government or your financial lender offers these options.

How to meet the qualifications of a first-time homebuyer

There are numerous first-time buyer home loans available with only a low or even no down payment required. You may be wondering what qualifies a borrower as a first-time homebuyer, with the ability to take advantage of these amazing options. We’ll break it down for you.

For government-backed first-time buyer home loan programs, you are considered eligible if you have not owned a home within the last three years. Even if you have previously owned a home, you still may be eligible for some of the home loan programs, as long as you meet the other qualifying criteria listed for the offered programs.

If you own a rental or investment property, you do not qualify as a first-time homebuyer, even if you have never lived at the property. There may be other qualifiers, such as the home may need to meet certain safety guidelines to qualify for the home loan. There also may be income requirements that must be met to qualify for some state and local government first-time buyer home loan programs.

On the other hand, financial lenders offer low- and no-money-down home loans that have fewer qualifying requirements than government-backed loans. If you would like to know if you qualify for one of these low- or no-money-down home loans, contact Solarity Credit Union to speak with an expert Home Loan Guide and apply to get pre-approved.

What are the benefits of being a first-time homebuyer?

For those looking to make the leap into homeownership, being a first-time homebuyer comes with borrowing perks that make getting a home loan more attainable. If you haven’t owned a home within the last three years, you can qualify as a first-time homebuyer, and this makes more home loan options available to you. These options often include lower interest rates and lower down payment requirements.

Some first-time buyer home loans come with other financial benefits as well, such as no closing costs or no private mortgage insurance (PMI) requirements. If you qualify as a first-time buyer, you may be wondering which loan option is best for your financial situation. Let’s look at some of the loan options available.

What if you can’t afford to pay a down payment?

As a first-time homebuyer, you may not be prepared to put down 20% of the total home cost up front. Some lenders, including Solarity, offer 100% financing, meaning you don’t have to come up with a down payment. Some borrowers opt to put some money down, even if it’s not the full traditional 20%. Working with an expert Home Loan Guide who can help you crunch the numbers is a great option since there is no obligation to apply. If you already own a home, you can use your first home as collateral for a bridge loan, which can then be used as a down payment on the new home you want to purchase.

At Solarity Credit Union, there are loans available to first-time homebuyers that offer low- or no-down-payment options. This includes a USDA home loan option, which is specific to more rural areas. This includes a reduced down payment and fixed interest rates and can include the closing costs in the mortgage loan instead of paying them up front. This helps to reduce the total out-of-pocket costs when purchasing your first home. This loan option has location and income restrictions that need to be met to qualify. Talk with a loan expert at Solarity Credit Union today and apply to get pre-approved for your home loan.

Options available to first-time homebuyers today are less restrictive and easier to qualify for. Each lender offers different home loan options, so always check with your lender to see what’s available to you as a first-time homebuyer.