Most, if not all, states have some type of first-time homebuyer program. You can find out what's available in your area by contacting your local government housing office. Typically, potential homeowners must meet various criteria regarding income levels and credit ratings. Down payment assistance may be available as well; sometimes first-time homebuyers don't even have to repay the amount.
While all programs differ, here are the basics of Ohio's first-time homebuyer program as an example:
- Applicants must meet Ohio Housing Finance Agency (OHFA) income limits, have a credit score of at least 640, have a signed purchase and sales agreement for a qualifying property and qualify for the loan being requested.
- Properties must meet purchase price limits, which vary by county.
- Applicants must also fall into at least one of these four categories:
- Never owned real estate
- Active serviceperson or veteran
- Purchasing a home in one of OHFA's target areas
- Never owned or had an ownership interest in their principal residence in last three years
If you qualify, there's no specific loan you'd get, as with the FHA, VA or Department of Agriculture loans. But in general you'd receive a loan with better rates, lower fees and more flexible payment plans than if you approached a lender independently [source: Ohio Housing Finance Agency].