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Basics Intermediate: How to Finance a Home

Introduction to How to Finance a Home Saving or Investing to Buy a Home Using Private Loans to Buy a Home Buying a Home Through Seller Financing First-Time Homebuyer Programs Government Loans to Finance a Home Summary of How to Finance a Home
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First-Time Homebuyer Programs

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First-Time Homebuyer Programs

If you are a first-timer at homebuying, the government wants to help you out. There are programs just for you that offer financial assistance. They come with restrictions and rules, however, which you should consider carefully. Your local bank, credit union, or other financial institution likely works with first-time homebuyer programs and can help you learn about them.

Programs can vary, but some common features include the following:

  • A down payment less than the usual 20%. With some, no down payment at all.
  • A limit on fees that lenders can charge.
  • Access to grants and loans that offset the purchase price of the home.
  • Subsidization of interest costs.

Limitations

There are restrictions on who can qualify. Restrictions vary, but typically include:

  • Certain income requirements
  • A sufficient credit score
  • A maximum dollar value of the loan
  • Residence: you must actually live in the home
  • Physical condition of the home
  • Minimum residence: you may have to live in the home for a minimum number of years

As well, you can qualify for the "mortgage credit certificate" if you meet certain criteria. It lets you claim a tax credit for some portion of the mortgage interest you pay during the year.