Nationwide first-time homebuyer programs

To get a “conventional” mortgage in the private market, you’ll often need a credit score of 620 and at least 5% of the price of the home for a down payment.

More: Use these savings accounts to build up your down payment.

Not everyone has a score that high or that much cash on hand. Luckily, the federal government has a number of nonconventional mortgage options that can help first-timers break into the market.

FHA loans

Federal Housing Administration (FHA) loans were created in 1934 to help more Americans become homeowners. At the time, fewer than half of American households actually owned their homes. Since its creation, the FHA has insured more than 46 million mortgages.

FHA loans typically have a minimum credit score of 580 and a 3.5% down payment, but if you put down more money upfront, you could qualify with a score as low as 500. Keep in mind, if your down payment is less than 10%, you’ll also have to pay a mortgage insurance premium.

The FHA's Loan Requirements Explained.

A walkthrough of how to meet the FHA's requirements.

See Guide

VA loans

Congress passed the act that created these loans in 1944 with a goal to increase benefits to veterans. As a result, the U.S. Department of Veterans Affairs (VA) can guarantee or insure home loans made to veterans by a number of lending institutions.

VA loans are available to active service members, veterans and some surviving military spouses. Borrowers have to pay a funding fee but aren’t required to offer a down payment or pay mortgage insurance.

USDA loans

Similarly, USDA loans, which are targeted to lower-income rural and suburban Americans, don’t require down payments or private mortgage insurance. These loans are guaranteed by the United States Department of Agriculture.

Borrowers will have to pay an upfront 1% guarantee fee and an annual 0.35% fee with these loans, but that generally averages out to less than what you’d pay in mortgage insurance with another loan.

The USDA is pretty strict about who qualifies for these loans, income-wise. The current income limits in most parts of the U.S. are $86,850 for one- to four-member households and $114,650 for five- to eight-member households, but the thresholds may be higher if you live in a county with a steeper-than-average cost of living.

The USDA’s website allows you to search for the exact limits in your region.

Do you qualify for first-time homebuyer programs in Washington?

WSHFC’s programs help buyers in Washington State secure loans with a lower monthly mortgage payment, making homeownership more accessible to a wider range of families.

Before you start cruising the homes for sale where you live, you must first attend a commission-sponsored homebuyer education seminar. You’ll receive a certificate that is good for two years.

From there, you’ll work with one of the WSHFC’s participating mortgage lenders to get the process going. The WSHFC does not directly grant mortgage loans.

Because of that, you’ll also have to meet the standard requirements for your chosen type of loan at the participating lender.

More: Get a free credit score and credit monitoring from Credit Sesame.

First-time homebuyer programs in Washington State

Infographic on programs for first-time home-buyers in Washington State

These programs are not all exclusively for first-time homebuyers. Veterans and individuals buying homes in the state’s targeted areas may also qualify for assistance.

However, these programs are primarily for lower-income households, so your household’s income cannot exceed $145,000.

Home Advantage Program

This program is designed to help residents secure a good interest rate on a home loan. Working through one of the commission’s participating lenders, you’ll qualify for a 30-year mortgage with a special interest rate as well as down payment assistance of up to 4% of your total loan.

You can find the Home Advantage rates on WSHFC’s website.

Home Advantage Down Payment Assistance

WSHFC recognizes that for many households, a significant hurdle to becoming a homeowner is the down payment and closing costs.

The commission lowers this barrier by offering loans you can use to pay these upfront costs. You’ll need to have a mortgage through the Home Advantage program and a minimum credit score of 620.

With the Home Advantage DPA, you can qualify for up to 4% of the total loan amount or even 5% if you’re using WSHFC’s conventional HFA Preferred loan.

The loan has a 0% interest rate, and you won’t need to make any payments for 30 years.

The Mortgage Underwriting Process Explained

A walkthrough of proven steps to getting a mortgage approval.

See Guide

Home Advantage Down Payment Assistance – Needs Based Program

This down payment assistance program also requires you to have a Home Advantage mortgage.

With the needs-based program, you can receive a loan of up to $10,000, with a 1% interest rate. Payment will still be deferred for 30 years.

Because this is a needs-based program, you’ll have to meet specific household income limits: no more than $113,300 in King/Snohomish and $89,800 in all other counties. However, if you are a veteran, you are exempt from the assessment of need.

House Key Opportunity Program

This program helps first-time homebuyers — and those buying in targeted areas — secure a mortgage with a below-market interest rate.

To qualify for help, you’ll have to fall within your region’s income limits, and your loan cannot exceed $510,400.

You’ll also have to qualify for one of the commission’s compatible down payment assistance loans, including the Opportunity DPA — unless you’re buying a brand-new property that’s never been occupied.

Opportunity DPA

Opportunity is a down payment assistance program that offers up to $10,000 in the form of a second mortgage. It’s tied to the House Key Opportunity Program, so you need to qualify for the primary mortgage first.

The down payment assistance loan comes with a 1% interest rate, but payment will be deferred for 30 years.

The Best Lenders for a Mortgage

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Next steps

Now you know what programs are out there to help you. But where do you even start?

Well, in almost every case your credit score is crucial. If you don’t know your score, a free service like Credit Sesame can help you find it.

Some of these programs have credit score requirements, but don’t despair if yours comes up short. There are some great options out there, like Self credit repair, that will help you get the score you need.

Next, collect all of your essential documents. You’ll usually need to show that you have money in the bank and a steady income.

Once you’re all set, getting pre-approved for a mortgage will give you an idea of what you can afford and the interest rates you’ll have to pay.

Support for new homebuyers in other states

Arizona Department of Housing (ADOH) Read More
Arkansas Development Finance Authority (ADFA) Read More
California Housing Finance Agency (CalHFA) Read More
Colorado Housing and Finance Agency (CHFA) Read More
Connecticut Housing Finance Authority (CHFA) Read More
Delaware State Housing Authority (DSHA) Read More
Florida Housing Finance Corp. (Florida Housing) Read More
Georgia Dream Read More
Hawaii Housing and Finance Development Corporation (HHFDC) Read More
Idaho Housing and Finance Association Read More
Illinois Housing Development Authority (IHDA) Read More
Indiana Housing and Community Development Authority (IHCDA) Read More
Iowa Finance Authority (IFA) Read More
Kansas Housing Resources Corporation Read More
Kentucky Housing Corporation (KHC) Read More
Louisiana Housing Corporation (LHC) Read More
MassHousing (Massachusetts) Read More
Michigan State Housing Development Authority (MSHDA) Read More
Minnesota Housing Read More
Missouri Housing Development Commission (MHDC) Read More
Montana Board of Housing (MBOH) Read More
Nebraska Investment Finance Authority (NIFA) Read More
Nevada Housing Division Read More
New Mexico Mortgage Finance Authority (MFA) Read More
State of New York Mortgage Agency (SONYMA) Read More
North Carolina Housing Finance Agency (NCHFA) Read More
Ohio Housing Finance Agency (OHFA) Read More
Oklahoma Housing Finance Agency (OHFA) Read More
Oregon Housing and Community Services (OHCS) Read More
Pennsylvania Housing Finance Agency (PHFA) Read More
South Dakota Housing Development Authority (SDHDA) Read More
Tennessee Housing Development Authority (THDA) Read More
Texas Department of Housing and Community Affairs (TDHCA) Read More
Utah Housing Corp Read More
Virginia Housing Read More
Washington State Housing Finance Commission (WSHFC) Read More
Wisconsin Housing and Economic Development Authority (WHEDA) Read More
Wyoming Community Development Authority (WCDA) Read More

About the Author

Sigrid Forberg

Sigrid Forberg

Staff Writer

Sigrid is a staff writer with MoneyWise. A graduate of Carleton University's journalism program, she spent the better part of the last six years writing about business and retail. In her spare time, she enjoys reading, baking and riding her bicycle.

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