First-Time Home Buyers

For first-time home buyers, coming up with a 20% down payment can be difficult. Fortunately first-time home buyers have options to help reduce or eliminate down payments and closing costs.

  1. Conventional 3% — Offered by Freddie Mac or Fannie Mae the HomeReady and Home Possible program offer 3% down payment and a minimum FICO score of 620.

  2. FHA Loan — Backed by the Federal Housing Administration. 3.5% down and a 550 minimum credit score. But you’re on the hook for mortgage insurance premiums (MIP) until you refinance to a different type of mortgage, move, or pay off your loan

  3. VA Loan — Only for veterans and service members. Zero down payment is required. Minimum credit score varies by lender but often 580. No ongoing mortgage insurance after closing. These are arguably the best mortgages available, so apply if you’re eligible

  4. USDA Loan — For those on low-to-moderate incomes buying in designated rural areas (so high-density populations like Philadelphia and Delaware counties rarely qualify). Zero down payment required. Credit score requirements vary by lender but often 640. Low mortgage insurance rates

  5. Pennsylvania Housing Finance Agency Loans — May include competitive interest rates and down payment assistance

Eligibility

  • Conventional 3% — While not exclusive to first-time home buyers, the applicants qualifying income is limited to 80% of the Area Median Income (AMI). Use the Home Possible Income & Property Eligibility Tool to see the income limits for your specific area.

  • FHA Loan — anyone who meets basic FHA loan qualifications

  • VA Loan — Only for veterans, service members or surviving spouses

  • USDA Loan — For those on low-to-moderate incomes buying in designated rural areas (so high-density populations like Philadelphia and Delaware counties rarely qualify)

  • Pennsylvania Housing Finance Agency loans — for those on low-to-modersate incomes. Contact us for more information.  

What Type of Home Can I Buy?

  • Existing Single-Family Home

  • Townhouse or Condominium (with some exceptions)

  • New Construction Residence

  • Manufactured Homes

  • Home Refinances and Certain Types of Home Improvements

What are the Benefits to a First-Time Homebuyer Program?

Conventional 3%

  • Only 3% down payment required

  • Down payments can come from a variety or sources, including family, employer-assistance programs and secondary financing

  • Can finance up to 105% of the value with a purchase money second. This can be used to cover the down payment and closings fees so virtually no money is paid out of pocket at closing

  • Can receive up to 3% sellers assist with 3-10% down payment. May receive up to a 6% sellers assist with 10-25% down

FHA Loan — See the FHA page

VA Loan — See the VA page

USDA Loan — See the USDA page

Pennsylvania Housing Finance Agency loans — reduced down payment and closing costs. Contact us for more information. 

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