First Time Home Buyer Loan Programs

If you have made the decision to purchase your first home, you may benefit from some of the “First Time Homebuyer” mortgage programs which exist. Many lenders offer the Fannie Mae HomeReady and Freddie Mac Home Possible programs to qualified borrowers. In addition, Virginia, Maryland, and DC each have mortgage revenue bond programs available to assist first-time buyers. It is useful and important to consult with a locally based lending institution to determine what programs may be available and useful to you.

The Fannie Mae and Freddie Mac programs provide similar benefits and have similar qualification requirements. Both programs allow for a down payment as low as 3% of the purchase price and, also allow for some or all the down payment to come from gifts from family members.

The programs have maximum income thresholds equal to 80% of the area median income but also provide flexibility in what can be used as qualifying income. For example, parents, who won’t be living in the home, can be co-borrowers on the loan to help their children qualify for a mortgage and purchase a home.

The interest rates are often slightly more favorable under the Fannie and Freddie programs and the mortgage insurance premiums are as well.

First-time buyers in Virginia may avail themselves to the programs offered by VHDA, now known simply as Virginia Housing. Lenders providing VHDA loans can lend up to 101.5% of the purchase price of the home through the “Plus” program, providing the buyer with a very low cash outlay requirement. As an alternative to the “Plus” program, buyers could also choose either the Down Payment Assistance Grant program or the Closing Cost Assistance Grant program neither of which have repayment requirements.

The Maryland Mortgage Program (MMP) allows lenders to provide 30-year fixed-rate home loans to eligible homebuyers purchasing in Maryland with competitive rates and with down payment and closing cost assistance.

DC Open Doors helps make homeownership in Washington, D.C. affordable by offering qualified buyers home purchase loans, down payment and closing cost assistance. The program offers deferred repayable loans for a homebuyer’s minimum down payment requirement in addition to below-market interest rates for first trust mortgages.

HUD’s FHA programs require down payments of only 3.5% and allow for debt-to-income ratios significantly higher than most other mortgage programs. While not limited to first time home buyers, it is often the program of choice for this group of purchasers as there is no maximum income limit.

Finally, VA loans are a great option for first-time buyers who may not have enough available cash to make any down payment. Qualified veterans and active duty service members can finance 100% of the purchase price of the property with fixed-rate loans which allow for higher debt-to-income ratios than almost all other programs.

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Brian Bonnet | Senior Loan Office
Atlantic Coast Mortgage, LLC
NMLS ID# 224811
e: bbonnet@acmllc.com | t: 703-766-6702

A lifelong resident of Northern Virginia, Brian brings twenty-five years of lending experience to the group. After graduating from The Citadel and serving as a Naval Officer, Brian transitioned to the United States Senate Veteran’s Affairs Committee where he served as a Professional Staff Member and had the responsibility of overseeing the VA Loan Guaranty program. After leaving Capitol Hill and the political world, Brian entered the mortgage banking industry. Keeping abreast of the myriad changes in the lending industry over the years has given Brian a unique perspective and the ability to successfully serve his clients regardless of the current market conditions. With his extensive knowledge about the VA and its loan guaranty program, Brian is widely recognized as a specialist in VA financing. He enjoys sharing his knowledge and experience with others and is certified to teach Financing Continuing Education in Virginia, DC, and Maryland.

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