You don’t have to be brand new to real estate to qualify as a first-time home buyer. According to the Federal Housing Administration (FHA) and the IRS, you may be considered a first-time buyer if you haven’t owned a primary residence, meaning a home that isn’t a vacation or rental property, in the past three years.

You may also qualify if:

• You previously owned a mobile or manufactured home that wasn’t permanently attached to a foundation
• You inherited a home, but never lived in it as your primary residence
• You owned a property that didn’t meet local or state building codes and would have cost more to repair than rebuild

Thanks to these broader definitions, you may have some of the qualifications for first-time home buyer programs, grants and loans.

First-time home buyer programs are designed to make homeownership more accessible, especially if you’re working with a tight budget or limited credit history. These programs can help ease common roadblocks by offering: 

•  Low or no down payment: Some loans require as little as 3% down , or even nothing at all. 
• Reduced closing costs: Grants or lender credits can offset fees like inspections, appraisals and title services. 
• Flexible credit requirements: Many programs are open to buyers with fair or limited credit histories. 
• Homeownership education courses: You’ll get access to courses that walk you through the basics of budgeting for a mortgage and long-term financial planning. 
• State and federal tax credits: Depending on where you live, you may qualify for valuable tax breaks that lower your overall cost of buying. 

 The goal of these programs is to make homeownership feel possible, so you can focus on finding the right place to live instead of how to afford it.

While every first-time buyer program has its own requirements, two major factors typically come into play:

• Your debt-to-income ratio (DTI): Your DTI measures how much of your monthly income goes toward debt payments. A lower ratio signals to lenders that you’re more likely to manage mortgage payments consistently. Estimate your DTI now with our DTI Ratio Calculator.
• Your credit score: Your credit score plays a significant role in determining your eligibility. Higher credit unlocks better interest rates and more loan options. Minimum score requirements may vary by loan type, so always double-check the requirements when you apply.

Other factors that can affect your eligibility are:

• Income limits: Many programs set income caps based on your area’s median income.
• Home purchase price caps: Some programs limit how much you can spend on your new home, ensuring that the assistance is directed to those who need it most.
• Location: Some programs are only available in specific counties, cities or ZIP codes.
• Education courses: You may need to complete home buyer education classes.

Before diving into specific loan types, let’s look at the big picture. Most first-time buyer programs fall into four main categories. Here’s a quick overview:

Institutional lender programs

Banks and other private lenders offer mortgage programs specifically for first-time buyers with relaxed requirements and reduced costs. For example, Citi's HomeRun® Mortgage offers a low-down payment option that helps support buyers from a wide range of financial situations as they take their first steps into buying property. However, such programs may be available only in select markets or have other limitations, such as income or purchase price caps, so be sure to read the fine print.

Government-backed programs 

The federal government offers many different types of programs to help first-time home buyers. There are loans backed by government agencies like the FHA, or loans for specific groups of people like VA loans, which are geared toward military veterans and their families. With these loans, the government insures the loans so lenders are protected even if the borrower defaults. 

The government also supports the availability of funds for mortgages through government-sponsored enterprises like Fannie Mae and Freddie Mac, offsetting costs for both banks and borrowers.

State and local programs 

Many states and localities offer their own programs, separate from the federal government. These programs can include down payment assistance, competitive mortgage rates and tax credits tailored to make homeownership more accessible. You can even combine them with federal programs to maximize your benefits. 

Charitable, nonprofit and other programs 

Charitable and nonprofit programs offer grants and assistance, often targeting specific communities. Requirements to qualify can differ across programs, so make sure to understand the application process.

Now that you’ve got the big picture, let’s dig deeper into the popular loans, programs and grants that you might qualify for.

FHA Loans

FHA loans are offered by the Federal Housing Administration. They let you put down as little as 3.5% if you have fair credit. Plus, they come with a unique perk: Your mortgage may be assumable. That means if you put your home back on the market, a buyer can take over your loan with the same interest rate. 

Keep in mind that FHA loans come with mandatory mortgage insurance premiums (MIP) that may increase your monthly payment, along with restrictions and requirements specific to an FHA mortgage.

VA Loans

VA loans are available to veterans, active-duty service members and eligible surviving spouses. You may qualify for competitive interest rates thanks to support from the U.S. Department of Veterans Affairs.

Citi HomeRun Mortgage

Citi’s HomeRun Mortgage is a great option for first-time buyers and those in underserved communities. Requiring as little as 3% down and no PMI, this mortgage option helps make homeownership more accessible. HomeRun also offers flexible credit guidelines and allows non-traditional income sources to support buyers who may not qualify for conventional loans.

HomeReady® Mortgage

This program from Fannie Mae caters to low- to moderate-income buyers. Requiring a down payment as low as 3% and offering the ability to use gift funds or grants, HomeReady loans are especially helpful if you’re buying in a high-cost area or earning less than the area’s median income. Select markets only and income limitations apply.

Many states offer first-time home buyer grants and assistance programs that can help cover upfront costs like the down payment and closing fees. These programs are typically provided through each state’s Housing Finance Authority (HFA) and may be combined with federal or lender-backed loan options. 

Down payment assistance (DPA) 

Saving for a down payment is one of the biggest hurdles for new buyers. That’s why many states offer down payment assistance (DPA) through grants or forgivable loans. These programs can cover thousands of dollars toward your purchase, some with no repayment required if you stay in the home for a certain number of years. 

Closing cost support 

State and local programs may help with closing costs like inspections, title fees and escrow charges. Support may come in the form of grants, deferred-payment loans or matched savings programs. These can ease the financial burden of homebuying and help you move forward with less cash up front. 

Explore state programs 

Grant and assistance programs vary widely by location. Here are some popular state-level options to explore:

• California: CalHFA MyHome Assistance Program 
• Florida: Florida Assist program
• Texas: My First Texas Home and Texas Bootstrap Loan Program 
• New York: Achieving The Dream Program 
• Illinois: IHDAccess Forgivable 

To get the most accurate info, visit your state’s Housing Finance Authority website. 

 Also, be sure to check out our Cost of Living Calculator to possibly evaluate affordability in your state, or our Home Affordability Calculator to see how much home you can afford. 

Plenty of charitable, nonprofit and third-party groups work to see homeownership thrive in their community. These are just a few standout programs, so look into what’s available in your neck of the woods, from company benefits to local housing initiatives. 

Habitat for Humanity 

This nonprofit rolls up its sleeves and builds or revamps homes for those in need. They offer generous zero-interest loans to first-time home buyers who earn 60% or less of the local median income.

Neighborhood Assistance Corporation of America

This HUD-certified nonprofit helps first-time home buyers obtain a low-rate mortgage without a down payment, closing costs, or mortgage insurance. If you have lower credit, no worries. This program uses rent payment history and other factors to determine your eligibility. 

Employer-sponsored first-time home buyer programs

Some employers also offer benefits to help you buy a home, including matching contributions or direct grants toward your down payment. There may be rules around income limits and how long you’ll need to stay at the job. 

Loans and grants for student borrowers 

There are even programs that cater to students with limited savings and significant debt. For instance, Ohio offers a Grants for Grads program that provides up to 3-3.5% down payment support for recent graduates.