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What is a First Time Home Buyer Loan?

A person’s first home purchase is a big deal. It takes time, energy, and money. To help with the money hurdle, some people use first time homebuyer loans. These programs vary depending on where they are offered, but the general idea is this: first time homebuyer loans give financial assistance to qualified borrowers. They may do this in the following ways:

  • Allow for a very low (or no) down payment
  • Subsidize interest costs (they pay all or part of it)
  • Offer grants
  • Forgive loans
  • Limit fees that lenders are allowed to charge
  • Defer payments

Note that first time homebuyer loans available to you might offer any or none of the benefits listed above. You should research first time homebuyer loans available in your area. A good place to start is the HUD Web site on home buying programs.

Who Gets First Time Home Buyer Loans?

As you might imagine, individuals who have never owned a home are good candidates. In addition, some programs offer first time homebuyer loans to people who have not found a home within the last three years. Again, check to see what is available to you.