There are many great options for First Time Home Buyers


Good news.  You live in a day and age where many options exist when it comes to buying your first home.  There are specific loan programs available for first time buyers that offer lower interest rates, lower down payments (including zero money down), or a combination of both.  

Who qualifies as a First Time Home Buyer?

The US Department of Housing and Urban Development (HUD) defines a first time home buyer as:

  • Someone who has never owned a home
  • Someone who has not owned a home in the last 3 years
  • A single parent who has only owned with a former spouse while married
  • Someone who is a displaced homemaker and has only owned with a spouse
  • Government loans (USDA, VA, FHA) can be even more flexible in their definition of a first time buyer.  We can help you determine if one of these may be a good fit for you depending on your qualifying criteria

Types of First Time Buyer Loans

USDA Loans

If you are purchasing in an area that is considered to be rural or semi-rural, then a USDA loan could be an excellent choice to finance your first home.  These loans offer competitive interest rates and require no down payment.  This can be a great help to buyers who have limited funds for closing.  The home must be located in a USDA-eligible area and some entire cities (such as Newberry, SC) are eligible for USDA loans.  Visit our USDA page for more details on this great first-time buyer program.

FHA Loans

FHA loans are available to individuals who do not currently own a primary residence and do not currently have another FHA loan.  FHA loans offer very competitive interest rates and are more flexible when it comes to credit scores and overall credit rating.  These loans require a down payment of 3.5%.  If you have less than perfect credit, an FHA loan could be a good fit for you when buying your first home.

VA Loans

VA home loans provide competitive housing options to qualified veterans, current service members, and surviving spouses.  VA loans do not require any down payment and have no monthly mortgage insurance.  They also have very flexible credit guidelines which makes it easier to qualify if a veteran or service member has less than perfect credit.  If you qualify, a VA loan is one of the best options available for first time buyers.

Conventional Loans for First-time Buyers

The Fannie Mae and Freddie Mac agencies (also known as conventional financing) offer first-time buyer loans that only require a 3% down payment and in some cases only a 1% down payment if the buyer's income is under a certain threshold.  In addition, these loan programs have interest rates and monthly mortgage insurance rates that are lower than standard conventional loans.

Another great conventional first-time buyer loan that we currently offer is the 2-1 Rate-Break loan.  This amazing program provides a 2% discounted interest rate in the first year of the loan and a 1% discounted rate in the second year of the loan.  This provides for a greatly discounted interest rate and payment for the first two years of the loan term at no cost to the buyer.  There are income thresholds for this program and the maximum loan size is $350,000.  But for first-time buyers who meet the guidelines, this is a game-changing program. 


If you want to learn more about our many first time homebuyer programs, give us a call at 803-771-0080 or fill out the short form on this page and we will get back with you promptly.