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What is a First-Time Home Buyer Incentive?

By C. Daw
Updated May 17, 2024
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Many couples and young adults believe that the opportunity to own a home is just out of their range and that home ownership is not attainable to them. It is important to realize that there are various first-time home buyer incentive programs available that can make home ownership not just a dream, but a reality. Government agencies, like Fair Housing Administration (FHA) and Housing and Urban Development (HUD), Veteran Affairs (VA) and the Internal Revenue System (IRS) offer several first time home buyer incentives, like down payment assistance, tax credits and lower selling prices. Some mortgage companies also offer different flexible mortgage options to help with first-time home buyer incentive programs.

For first-time home buyers, one of the hardest parts of home ownership can be saving enough money to use as a down payment. There may be home buyer incentives that will help lower the amount of down payment that is needed in order to secure a mortgage. The FHA may have programs that require a lower down payment and allow the money to come from other programs, as gifts or by any other means. The VA offers all active and retired members of the military to guaranteed loan up to a percentage of their home mortgage and for many mortgage companies this may eliminate the need for any down payment at all.

There are also many states that offer different first-time home buyer incentive programs that help with paying for a down payment, but these programs vary widely from state to state. A mortgage advisor should be able discuss the programs offered in each state. HUD also offers first time home buyers an opportunity to buy homes that have been foreclosed or need rehabilitation, at a greatly reduced rate. Since the selling price is not as high, the required down payment will be lower and more manageable. The HUD website or local real estate agent will help find HUD homes in any area that are eligible for the reduced rate.

Mortgage companies have made home ownership easier by offering a first-time home buyer incentive. This first time home buyers program makes their mortgages more flexible and easier to manage. Some of the options they offer are lower down payments requirement, no appraisal fees, forgiveness for one missed mortgage payment through the year, and other great features. Contacting a mortgage adviser will help determine which of these offers are best. They can also advice people on what IRS tax credits are available once the home is purchased.

WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.

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