How much house can I afford?

A common guideline is that your monthly housing costs (including mortgage, taxes, and insurance) shouldn't exceed 28% of your gross monthly income. Most lenders also look at your total debt-to-income ratio, which should typically be below 43%. Use our affordability calculator to get a personalized estimate based on your income, debts, and the current interest rates.

What's the minimum credit score I need to buy a home?

It depends on the loan type. FHA loans accept scores as low as 500 (with 10% down) or 580 (with 3.5% down). USDA and VA loans typically require 620+, though some lenders are flexible. Conventional loans usually need 620+, with better rates at 740+. Even if your score is lower, don't give up—some programs specialize in helping buyers with credit challenges.

How much do I need for a down payment?

Less than you might think. VA and USDA loans offer 0% down for eligible buyers. FHA loans require just 3.5% down. Conventional loans can go as low as 3% for first-time buyers. Plus, down payment assistance programs can cover some or all of your down payment in many areas.

Do I need to put 20% down to buy a house?

No, this is one of the biggest myths in home buying. While 20% down lets you avoid private mortgage insurance (PMI) on conventional loans, most first-time buyers put down far less. The national average is around 6-7% for first-time buyers.

What is the difference between FHA and conventional loans?

FHA loans are government-insured and have lower credit requirements (580+ for 3.5% down) but require mortgage insurance for the life of the loan. Conventional loans are not government-backed, typically require higher credit scores (620+), but allow you to remove PMI once you reach 20% equity.

Can I use a USDA loan if I don't work in agriculture?

Yes! USDA loans have nothing to do with farming. They're designed to help moderate-income buyers purchase homes in eligible rural and suburban areas—and 97% of U.S. land qualifies.

What is Area Median Income (AMI) and why does it matter?

AMI is the midpoint income for a geographic area. Many first-time buyer programs use AMI to set income limits. For example, you might need to earn less than 80% or 115% of your area's AMI to qualify for certain programs.

Should I get pre-qualified or pre-approved?

Pre-approval is much stronger. Pre-qualification is just a quick estimate based on self-reported information. Pre-approval involves document verification and a credit check, giving you a real loan commitment that sellers take seriously.

What documents do I need for pre-approval?

Typically you'll need: 2 years of W-2s or tax returns, recent pay stubs (30 days), 2 months of bank statements, government ID, and Social Security number. Self-employed borrowers need additional documentation like profit/loss statements.

What is mortgage insurance and when is it required?

Mortgage insurance protects the lender if you default. FHA loans require MIP for the life of the loan (or 11 years with 10%+ down). Conventional loans require PMI if you put down less than 20%, but it can be removed once you reach 20% equity.

What is debt-to-income ratio (DTI) and what's acceptable?

DTI compares your monthly debt payments to your gross monthly income. Most lenders want your total DTI (including the new mortgage) below 43%, though some programs allow up to 50% with compensating factors.

Can I get a mortgage with student loans?

Yes! Student loans don't disqualify you, but they do affect your DTI calculation. FHA uses 0.5% of total loan balance (if payment not on credit report), while conventional loans may use the actual payment or 1% of balance.

What should I look for during a home inspection?

A professional inspector will check: foundation and structural integrity, roof condition, HVAC systems, plumbing and electrical, water heater, appliances, and signs of water damage or pests. Always attend the inspection and ask questions.

What is an appraisal and why is it required?

An appraisal is an independent assessment of the home's market value. Lenders require it to ensure they're not lending more than the home is worth. If the appraisal comes in low, you may need to renegotiate the price or make up the difference.

What are closing costs and how much should I expect?

Closing costs typically run 2-5% of the loan amount and include: lender fees, title insurance, appraisal, attorney fees, prepaid taxes and insurance. Many first-time buyer programs offer closing cost assistance, and sellers can often contribute toward costs.

What is earnest money and how much is typical?

Earnest money is a good-faith deposit showing you're serious about buying. It's typically 1-3% of the purchase price and goes toward your down payment at closing. If you back out without a valid reason, you may forfeit it.

Should I use a real estate agent or go directly to the seller?

Using a buyer's agent is almost always recommended, especially for first-time buyers. The seller typically pays the commission, so it costs you nothing. An agent helps with negotiations, paperwork, inspections, and can spot issues you might miss.

What happens at closing?

At closing, you'll sign final loan documents, pay closing costs and down payment, and receive the keys. The title is transferred to you, and the loan is funded. It typically takes 1-2 hours and can sometimes be done electronically.

What is a Mortgage Credit Certificate (MCC)?

An MCC is a federal tax credit that lets you claim a portion of your mortgage interest as a dollar-for-dollar tax credit (not just a deduction). First-time buyers in many states can get 20-50% of interest paid as a credit, up to $2,000 per year.

Can I refinance to remove PMI or get a better rate later?

Yes! Many first-time buyers refinance after a few years to remove PMI (once they have 20% equity), get a lower rate, or switch loan types. Just be aware of closing costs and make sure the savings justify the expense.

Can I buy a home with a co-borrower or co-signer?

Yes. A co-borrower (like a spouse) shares ownership and responsibility for the loan. A co-signer helps you qualify but doesn't live in or own the home. Both options can help if your income or credit alone isn't sufficient.

2,000+ Programs Nationwide

First-Time Homebuyer ProgramsYour Complete 2026 Guide

You don't need 20% down to buy a home. Discover government-backed loans, grants, and assistance programs that can help you become a homeowner—even with limited savings or less-than-perfect credit.

USDA/VA Down

3.5%

FHA Down

500+

Min Credit Score

State Programs

Check Your Eligibility Talk to a Specialist

Looking for state-specific programs?

Arizona Programs

Trusted sources:CFPB Home Guide HUD Homebuyers State HFA Directory DPA Resource

The Basics

What Is a First-Time Homebuyer?

Here's something that surprises a lot of people: you don't have to have never owned a home to be considered a "first-time homebuyer." The official definition is simpler than you might think.

The Official Definition

A first-time homebuyer is someone who hasn't owned a primary residence in the past 3 years. That's it. If you owned a home 4 years ago but have been renting since, you qualify as a first-time buyer again.

This definition comes from HUD (the U.S. Department of Housing and Urban Development) and applies to most federal and state programs. It opens the door for a lot more people than you might expect—including divorced individuals who gave up their home in a settlement, people who lost a home to foreclosure years ago, or anyone who sold their home and has been renting.

Myths vs. Reality

Myth

"I need 20% down to buy a house."

Reality

Many programs require 3.5% or less. USDA and VA loans require $0 down.

Myth

"My credit score is too low to buy a home."

Reality

FHA loans accept scores as low as 500. Many buyers qualify with scores in the 580-620 range.

Myth

"There's no help available for buyers like me."

Reality

Arizona offers multiple down payment assistance programs. The Arizona Department of Housing and local agencies run programs designed to help first-time buyers.

Loan Programs

Federal Loan Programs for First-Time Buyers

The federal government backs several loan programs that make homeownership more accessible. Each has different requirements and benefits—here's what you need to know.

FHA Loans

Federal Housing Administration

3.5%

Down Payment

FHA loans are the most popular choice for first-time buyers. They're insured by the government, which lets lenders offer better terms to people with lower credit scores or smaller down payments.

580+

Credit Score (3.5% down)

500+

Credit Score (10% down)

USDA Loans

Rural Development

Down Payment

USDA loans are one of the best-kept secrets in home financing. They offer 100% financing (zero down payment) and are available in more areas than most people realize—including many suburban neighborhoods.

Down Payment

115%

AMI Income Limit

VA Loans

Veterans Affairs

Down Payment

VA loans offer some of the best mortgage terms available—zero down payment, no mortgage insurance, and competitive rates. They're available to veterans, active-duty service members, and eligible surviving spouses.

Down Payment

Monthly PMI

Conventional

Fannie Mae / Freddie Mac

Down Payment

Conventional loans aren't backed by the government, but they often offer the best rates for buyers with good credit. First-time buyers with income at or below 80% of Area Median Income can qualify for just 3% down.

620+

Credit Score

20%

To Avoid PMI

Quick Comparison

Feature	FHA	USDA	VA	Conventional
Min Down Payment	3.5%	0%	0%	3%
Min Credit Score	500	580	No min*	620
Mortgage Insurance	Yes (MIP)	Yes (low)	No	If <20% down
Income Limits	No	Yes (115% AMI)	No	Some programs
First-Time Buyer Only?	No	No	No	Some programs

*VA has no official minimum, but most lenders prefer 580-620

Free Money for Your Home

Down Payment Assistance Programs

Arizona offers a range of down payment assistance programs. Many provide grants that never need to be repaid. Here's how to find and qualify for these programs.

Grants

Free money that never needs to be repaid. The best option when available.

$1,000 - $25,000+

Forgivable Loans

Forgiven over 5-20 years. Only repay if you sell or move early.

No Monthly Payment

Deferred Loans

No payments until you sell, refinance, or move out.

0% Interest Often

Second Mortgages

Monthly payments alongside your primary mortgage.

Low Interest Rates

Who Qualifies for DPA?

First-time buyers (or haven't owned in 3 years)

Low to moderate income (typically 80-120% AMI)

Buying a primary residence (not investment)

Working with an approved lender

Buying within local price limits

Completing homebuyer education (often required)

Meeting credit score minimums (varies by program)

Extra help in "target areas" (revitalization zones)

How to Find DPA Programs Near You

State Housing Agency

Every state has a Housing Finance Agency (HFA) with programs. Start here.

Down Payment Resource

Search downpaymentresource.com for programs in your area.

HUD Counselor

Free guidance from HUD-approved housing counselors who know local programs.

Your Roadmap

How to Use First-Time Homebuyer Programs

From checking your credit to getting your keys—here's the complete step-by-step process for first-time buyers using assistance programs.

Common Questions

First-Time Homebuyer FAQ

Real questions from real first-time buyers—answered by mortgage professionals. Click any question to see the answer.

Planning & Preparation

Pre-Approval & Loan Processing

Home Shopping & Offers

Closing & Post-Purchase

Helpful Resources

Official Resources & Tools

These trusted government and nonprofit resources provide free information and tools to help you on your homebuying journey.

HUD.gov

Official U.S. Department of Housing and Urban Development. Find FHA information, housing counselors, and homebuying guides.

Visit Site

USDA Eligibility Map

Check if a property location qualifies for USDA's zero-down-payment loan program. Many suburban areas are eligible.

Check Eligibility

Down Payment Resource

Search for down payment assistance programs available in Arizona and your local county.

Find Programs

CFPB Home Buying Tools

Consumer Financial Protection Bureau's toolkit including loan comparison tools, rate checker, and homebuying guides.

Explore Tools

HUD Housing Counselors

Find HUD-approved housing counseling agencies near you. Free or low-cost expert guidance on homebuying.

Find Counselor

AMI Lookup Tool

Check your Area Median Income limits by county. Determines eligibility for many assistance programs.

Check AMI

Looking for State-Specific Programs?

We've created detailed guides for the states we serve, with specific program information, local lender recommendations, and step-by-step guidance.

Arizona Programs

Ready to Get Started?

Your Dream Home Is Within Reach

Whether you're looking to buy in Arizona or anywhere in the U.S., we can help you find the right first-time homebuyer programs and guide you through the entire process.

Check Your Eligibility Now Call (602) 753-9600

Free consultation. No obligation. We'll help you understand your options.

First-Time Homebuyer ProgramsYour Complete 2026 Guide

What Is a First-Time Homebuyer?

The Official Definition

Who Else Qualifies? (Special Cases)

Myths vs. Reality

Federal Loan Programs for First-Time Buyers

FHA Loans

View Full FHA Requirements

USDA Loans

View Full USDA Requirements

VA Loans

View Full VA Requirements

Conventional

View Full Conventional Requirements

Quick Comparison

Down Payment Assistance Programs

Grants

Forgivable Loans

Deferred Loans

Second Mortgages

Who Qualifies for DPA?

How to Find DPA Programs Near You

State Housing Agency

Down Payment Resource

HUD Counselor

Complete State Housing Agency DirectoryState housing finance agencies + territories with contact info

Complete State Housing Agency Directory

How to Use First-Time Homebuyer Programs

1Check Your Credit ScoreKnow where you stand before applying

Check Your Credit Score

2Calculate Your BudgetDetermine what you can truly afford

Calculate Your Budget

3Research Programs in Your AreaFind DPA and loan programs you qualify for

Research Programs in Your Area

4Get Pre-Approved (Not Just Pre-Qualified)Show sellers you're a serious buyer

Get Pre-Approved (Not Just Pre-Qualified)

5Complete Homebuyer EducationOften required for DPA programs

Complete Homebuyer Education

6Find a Home Within Program LimitsStay within price and location requirements

Find a Home Within Program Limits

7Apply for Down Payment AssistanceSecure your grant or assistance loan

Apply for Down Payment Assistance

8Close on Your HomeSign the papers and get your keys!

Close on Your Home

First-Time Homebuyer FAQ

Planning & Preparation

How much house can I afford?

What's the minimum credit score I need to buy a home?

How much do I need for a down payment?

Do I need to put 20% down to buy a house?

What is the difference between FHA and conventional loans?

Can I use a USDA loan if I don't work in agriculture?

What is Area Median Income (AMI) and why does it matter?

Pre-Approval & Loan Processing

Should I get pre-qualified or pre-approved?

What documents do I need for pre-approval?

What is mortgage insurance and when is it required?

What is debt-to-income ratio (DTI) and what's acceptable?

Can I get a mortgage with student loans?

Home Shopping & Offers

What should I look for during a home inspection?

What is an appraisal and why is it required?

What are closing costs and how much should I expect?

What is earnest money and how much is typical?

Should I use a real estate agent or go directly to the seller?

Closing & Post-Purchase

What happens at closing?

What is a Mortgage Credit Certificate (MCC)?

Can I refinance to remove PMI or get a better rate later?

Can I buy a home with a co-borrower or co-signer?

Official Resources & Tools

HUD.gov

USDA Eligibility Map

Down Payment Resource

CFPB Home Buying Tools

HUD Housing Counselors

AMI Lookup Tool

Looking for State-Specific Programs?

Your Dream Home Is Within Reach