Get the Best Mortgage for First-Time Buyers

Searching for the best first time home buyer loan can feel overwhelming—especially when you're juggling rates, down payment requirements, and confusing lender terms.

But here’s the truth: the right loan program can save you thousands and fast-track your journey to homeownership.

At Loan Factory, we help first-time buyers like you navigate the mortgage process with full transparency, AI-powered tools, and access to 240+ wholesale lenders—so you never miss a better deal.

Top First-Time Home Buyer Loan Programs

1. FHA Loan – Flexible, Accessible, and First-Time Buyer Friendly

Down payment:
– 3.5% with credit score 580+
– 10% with credit score between 500–579
Minimum credit score: 500
Best for: Buyers with limited savings, lower credit, or past credit challenges
Why it works:
FHA loans are government-backed and designed to make homeownership easier. They allow smaller down payments and more flexible credit requirements than most conventional loans.

Tip: Some lenders may set stricter requirements. With Loan Factory’s 240+ lender network, we help you find one that accepts your credit profile.

2. Conventional 97 – Low Down Payment, Big Flexibility

Down payment: 3%
Minimum credit score: 620
Best for: Buyers with good credit and steady income, even with a smaller savings cushion
Why it works:
This loan is backed by Fannie Mae or Freddie Mac and offers low PMI (Private Mortgage Insurance), which can be canceled once you reach 20% equity. It's a strong alternative to FHA if you qualify.
Tip: If your credit score is 680 or higher, you may get a lower monthly payment than with an FHA loan—despite the smaller down payment.

3. VA Loan – $0 Down for Veterans and Active Military

Down payment: None required (0%)
Minimum credit score: Typically 620, but flexible depending on lender
Best for: Veterans, active-duty service members, and eligible surviving spouses
Why it works:
The VA loan offers 100% financing, no PMI, and competitive rates—making it arguably the most powerful mortgage option for those who qualify. Backed by the Department of Veterans Affairs.

Tip: VA loans allow higher debt-to-income ratios and more flexible guidelines than other programs.

4. USDA Loan – $0 Down for Eligible Rural and Suburban Areas

Down payment: None required (0%)
Minimum credit score: 620–640, depending on lender
Best for: Buyers in qualified rural or suburban areas with moderate income
Why it works:
Backed by the U.S. Department of Agriculture, this loan program supports affordable homeownership in less populated areas. It offers 100% financing, low mortgage insurance, and competitive fixed rates.

Tip: Use Loan Factory’s smart tool to check if a property is USDA-eligible—many suburban homes surprisingly qualify.

5. Down Payment Assistance (DPA) Programs – Local Help You Don’t Want to Miss

Down payment: Covered partially or fully via grants, forgivable loans, or deferred second mortgages
Minimum credit score: Varies by program (often 620+)
Best for: Buyers who qualify for FHA or Conventional loans but need help covering upfront costs
Why it works:
State and local DPA programs offer thousands in assistance to help first-time buyers cover down payments or closing costs. Many are forgivable after a few years of homeownership.

Tip: Loan Factory automatically checks which DPA programs you qualify for based on your location, income, and loan type—so you never miss free money.

→ Read more: First-Time Home buyer Checklist

Why First-Time Buyers Choose Loan Factory

Feature	What You Get
240+ Lenders	Instant rate comparison in real time
No Junk Fees	Transparent pricing—only pay actual costs
AI-Powered Application	Smart matching with the best loan for your situation
In-House Processing	$500 flat fee, faster closings
Local Advisors	Licensed support in 42 states
Built-in CRM + Alerts	Never miss a rate drop or DPA opportunity

"At Loan Factory, we make sure first-time buyers feel confident, informed, and fully supported—from pre-approval to closing."
— Thuan Nguyen, CEO & #1 Loan Officer in the U.S.

The Best First Time Home Buyer Loans by State

Loan Factory operates in 48 states in the US, helping buyers access local and state-specific DPA programs that most lenders don’t even mention.

Here’s a quick look at what’s available across the U.S.:

State	Program Highlights
California	CALHFA + MyHome: 3.5% DPA, low-rate fixed loans
Texas	TSAHC + My First Texas Home: DPA grants, second-lien assistance
Florida	FL HFA Preferred: 3–5% DPA, lower MI requirements
New York	SONYMA: Up to $15,000 in down payment and closing cost assistance
Colorado	CHFA SmartStep: 4% assistance, easy-to-qualify options
Georgia	Georgia Dream: $10,000+ for teachers, nurses, and first responders
Washington	Home Advantage & Opportunity DPA: 4–5% assistance, FHA and conventional options
Illinois	IHDAccess Forgivable: Up to $10,000 in forgivable assistance over 5 years
Michigan	MI Home Loan: $7,500–$10,000 in targeted ZIP codes
North Carolina	NC Home Advantage: Up to 5% DPA, $15,000 for community workers
Arizona	Home Plus / Pathway to Purchase: Grants up to 5% or $20,000 in select cities
Nevada	Home Is Possible (HIP): 4% assistance, VA options available
Ohio	YourChoice! DPA: 2.5% or 5% assistance with no repayment required
Pennsylvania	Keystone Advantage: Up to $6,000 in interest-free second loan
Oregon	Oregon Bond Program: Affordable interest rates + down payment help
Massachusetts	MassHousing / ONE Mortgage: Up to $50,000 in targeted cities like Boston
Indiana	First Place / Next Home: 3–6% DPA, forgivable after 2 years
Tennessee	Great Choice Program: $6,000 DPA + 30-year fixed-rate loans
Missouri	MHDC First Place: Cash grants and low fixed-rate options

Not sure what’s available in your ZIP code? Loan Factory’s smart application will match you to every eligible program in seconds.

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Ready to Find The Best First Time Home Buyer Loan for You?

Buying your first home doesn’t have to be complicated. With the right guidance, transparent quotes, and smart technology, you can feel confident every step of the way.

Let Loan Factory help you find the best first time home buyer loan—so you can stop renting and start building wealth.