Are you planning or thinking of purchasing your first home? When considering buying a house, many questions come to mind, and it can seem daunting given the innumerable options and purchase decisions one needs to make. However, while being a first-time home buyer can seem overwhelming, there is a positive side to it.

First-time home buyers have myriad financing options available, making the dream of owning a home a reality without having to become a financial burden. From national grants, loans, mortgage options, and several first-time home buyer programs, each has its benefits and offers low-interest options for first-time home buyers.

To help you out, here is a look at some of the best financing options that can help you make your dream of owning a home a reality:

First-Time Homebuyer Financing Options

A first-time home buyer can opt for many financial options, but each program has prerequisites and requirements. Some of the best financing options available include:

FHA Loan

Federal Housing Administration (FHA) loans are one of the most secure loan options available and are extremely popular given the flexibility and multiple options they offer. The minimum credit score for an FHA loan is between 500 and 580, and your minimum down payment will depend on your score. For example, you need a 3.5% minimum down payment if your credit score exceeds 580. However, if it is between 500 and 599, you will need at least a 10% down payment to be eligible. While FHA loans are not limited only to first-time home buyers, you cannot have 2 FHA-insured mortgages outstanding at the same time. However, a buyer who previously bought a home with FHA financing may use FHA financing for a subsequent purchase or refinance so long as the prior FHA loan is paid off (or will be paid off prior to closing).

VA Loan

A loan option backed by the US Department of Veterans Affairs (VA), a VA loan is applicable if you or your spouse are an active or retired member of the US military. If you qualify, you can get a mortgage with no down payment. Although there is no minimum credit score requirement, having at least a 640 or higher credit score is good practice when opting for this option.


USDA loans are backed by the US Department of Agriculture and provide up to a 30-year fixed mortgage to first-time home buyers. The minimum required credit score for this loan is 640, and the home has to be located in a designated rural area to qualify. There is no minimum down payment requirement. However, until you reach 20% equity, you will be required to pay a 1% upfront funding fee and a 0.35% annual fee on all monthly mortgage payments.

Fannie Mae Conventional Loan

A magnifying glass focuses on the “Fannie Mae” logo on their website.

The Fannie Mae Conventional Mortgage is one of the most popular options in the US and comes with a minimum down payment requirement of 3% with 30-year and 15-year fixed mortgage options. To qualify, you need a minimum credit score of 620+ and the lender will require you to purchase private mortgage insurance if you put in less than a 20% down payment.

Freddie Mac Home Possible Loan

If your credit score is 660 or higher, you can consider the Freddie Mac Home Possible loan program, which requires only a 3% down payment and has excellent benefits for first-time buyers. However, to qualify, your home has to be in a location that is in an underserved area, and your income cannot be greater than 80% of the median income in that area.

Energy-Efficient Mortgages (EEM)

An energy-efficient mortgage is ideal if you plan to make energy-efficient upgrades to your home. EEM is part of a conventional loan or one backed by FHA or VA and can help you finance upgrades like new insulation, double-panel windows, and other energy-efficient energy upgrades. To qualify, your home has to undergo an energy assessment that also offers suggestions on lowering your home’s energy use, which you need to comply with.


First-time home buyers have access to multiple financing options, which can help make the process of owning a home much more accessible. However, the many options available may make the decision tough, and many first-time home buyers find it challenging to sort through all the financing options and requirements. In addition, each program varies depending on the state, the location of your property, and the type of loan you are opting for. So make sure you look at all the available options and opt for the one best suited for you, depending on your credit score, financial history, and the downpayment you can afford.

An expert mortgage broker can help you zero in on the right option and guide you through the entire process. This ensures that from deciding on purchasing your property, you have an expert backing you up throughout the process. As a result, you can understand repayment options and make the home buying experience much simpler and hassle-free. Harborside Home Loans is a boutique mortgage brokerage that produces tailor-made mortgage solutions depending on your specific requirements.

This enables you to get the best available financial advice and get the ideal mortgage loan for your needs. To get more details, speak with our experts to help you get the answers to all your home-buying questions.