The 6 Best First-Time Home Buyer Loans for 2022

If 2022 is the year for you to buy a house and you want to know what the best first-time home buyer loans for 2022 are, you’ve come to the right place. For any first-time home buyer (as in you’ve never owned a home or haven’t owned a home in the past three years), you will most likely need all the help you can get to secure the home of your dreams. With this in mind, let’s take a look at the six best loans of 2022 for first-time home buyers:

 

1. Conventional Loans

Conventional loans are still a good option, particularly if you have a good and steady income and a good credit score. With this type of loan, you can get a mortgage with as little as 3% down, provided you have a credit score of at least 620. You will need mortgage insurance if you put down less than 20%, but this can be cancelled once you have paid off 20% of the principal.

 

 

2. FHA Loans

The Federal Housing Administration (FHA) backs loans for first-time home buyers. These loans are easier to get than a conventional mortgage because you can qualify with a lower credit score. You will need 3.5% as a minimum down payment and a credit score of at least 580. If you can put down at least 10%, you can get approved with a credit score as low as 500.

 

 

The best part is you don’t have to have a huge income to qualify. You will, however, need to pay for mortgage insurance if your down payment is less than 20%. There will be an upfront insurance fee and then monthly insurance payments that will last until you refinance.

 

 

3. USDA Loans

The U.S. Department of Agriculture (USDA) backs loans for homes in rural areas of the country. There are only certain areas of the country that qualify, but if you want a home in one of these locations and you qualify, you can get a mortgage with no down payment, low interest rates, low and mortgage insurance.

 

 

4. VA Loans

Veteran’s Affairs (VA) loans are designed to help veterans, active service members, and their spouse buy a home. This is a great way to buy a home. You don’t need a down payment, low to no closing costs, no mortgage insurance, and low mortgage interest rates. Plus, you can be accepted for the loan with a low credit rating. The one drawback is that there is a VA funding fee for the loan.

 

 

5. Fannie Mae HomePath Ready Buyer and Freddie Mac Home Possible Loans

Fannie Mae (the Federal National Mortgage Association) and Freddie Mac (the Federal Home Loan Mortgage Corporation) are both government sponsored entities. They provide conventional second mortgages backed by lenders at 3% down, but they have more flexibility in terms of credit score and loan options.

 

 

Fannie Mae also has a HomePath Ready Buyer program that provides you with a conventional mortgage with 3% down and up to 3% in closing costs on a home that has been foreclosed. This is an inexpensive way to get a home, but the home may need work when you buy it because the properties come as-is.

 

6. Good Neighbor Next Door Program

Finally, there is the Good Neighbor Next Door (GNND) program, which is sponsored by the U.S. Department of Housing and Urban Development (HUD). This is a great way to buy a home if you are a teacher, a police officer, a firefighter, or an emergency medical technician.

 

 

This program provides a 50% discount on homes that are in areas that are marked for revitalization. There are no qualification limits, but you do have to commit to living in your new home for at least 36 months.

 

 

Keep in mind that there are also programs that help first-time home buyers at the state, county, and municipal level. These include assistance with the down payment and closing costs. Contact your local government office to find out more. And if you need help securing a down payment, some lenders will allow a family member to gift you the money or have a co-signer on the loan.

 

 

For more information about first-time home buyer loans, contact one of our experienced team members today.

 

 

 

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Published 03.XX.21

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