States with the Best First-Time Home Buyer Programs

first time home buyer programs

If you’re looking to buy your first home and still deciding where to live, continue reading to learn where to find the best first-time home buyer programs. Each state has local housing authorities that offer different incentives to help make housing more affordable.

  1. New York – Achieving the Dream Program

New York is one of the most popular real estate markets. With several opportunities and a busy atmosphere, New York has the 9th highest home prices and the prices only continue to grow. However, buying a home isn’t impossible because of the State of New York Mortgage Agency (SONYMA)

Just like the name says, SONYMA’s Achieving the Dream Program makes buying a house in New York affordable. The program offers low mortgage rates and a minimum down payment of just 3%, which are critical attributes of a generous first-time home buyer program. This makes a mortgage affordable to nearly all U.S. residents. However, the Achieving the Dream Program can also be combined with SONYMA’s Down Payment Assistance Loan, which lowers the minimum down payment to just 1%. 

These alone make the Achieving the Dream Program tremendous but the last feature of this program is its no prepayment penalties. While initially offered as only a 30-year fixed mortgage, the lack of prepayment penalties means your mortgage term is as short as you like with early payments. You could pay off your mortgage in 15 years or choose whenever you want to make additional payments.

SONYMA also offers several incentives for first time home buyers in NY that offer a wide range of benefits. These benefits and their outstanding mortgage programs make New York’s first-time home buyer programs America’s best.

  1. Pennsylvania – HOMEstead Downpayment and Closing Cost Assistance

The Pennsylvania Housing Finance Agency (PHFA) is also one of the best first-time home buyer incentive providers. While their array of programs is not quite as extensive as SONYMA’s, PHFA offers several benefits to home buyers that are different from other housing agencies’. Pennsylvania home prices are also much cheaper than in New York, which makes their housing programs even more effective.

Their primary programs offer similar benefits to SONYMA’s. This means low mortgage rates and a low minimum down payment requirement. Your minimum down payment will vary between 3% and 5% depending on your financial circumstances. This is much lower than conventional mortgages and rivals FHA loans with a 3.5% minimum down payment. These mortgages also have no prepayment penalties. Initially offered at 30 years, you can shorten your mortgage term by simply making early payments. This gives you the flexibility of low monthly mortgage payments but also the freedom to pay off your mortgage when it’s convenient for you.

Premium quality mortgages are important, but PHFA’s standout feature is their down payment assistance. Most housing agencies provide down payment assistance in the form of a second mortgage or by purchasing equity in your home, but PHFA can help you with no strings attached. They do have a second mortgage option, which is a 0% loan that is paid back over 10 years, but they also have a forgivable second mortgage option through the HOMEstead Downpayment and Closing Cost Assistance Program. This program gives home buyers a second mortgage of up to $10,000 that does not need to be paid back. Instead, 20% of the original amount is forgiven each year, which makes it free money.

While the PHFA has slightly more expensive mortgages, they provide several high-quality programs for buyers in Pennsylvania and unconditional down payment assistance. This gives them the edge in providing some of the best first-time home buyer programs.

  1. Florida – Florida First and FL Assist

The Florida Housing Finance Corporation (Florida Housing) offers many programs that are similar to both SONYMA’s and PHFA’s programs. They offer affordable mortgages and attractive down payment assistance options.

Their primary mortgages have low mortgage rates and lower down payment requirements than conventional loans. Their primary mortgages are affordable, but their primary attractor is their other programs. You can receive a 3-5% grant on a conventional loan for down payments and closing costs. Additionally, prepayment penalties are illegal in Florida, so you can start with a 30-year mortgage and pay it back sooner just like with SONYMA and PHFA loans.

Florida Housing’s assistance programs are more than generous but come in the standard form of a second loan. With their Second Mortgage Program, you can receive up to a $10,000 second loan at only a 3% interest rate while with their FL Assist program, home buyers receive up to $7,500 as a deferred loan. This means you won’t have to make any payments on this loan. You just have to return the loan when you sell your home. This makes getting a loan significantly cheaper and it effectively reduces the home price by $7,500.

Florida Housing offers many benefits that other housing agencies offer, but Florida Housing offers almost all of them. With a wide range of programs for buyers in Florida, this state has some of the most flexible mortgages available.

  • Take Your Pick

These 3 states have the best programs for first-time home buyers. Their programs make housing affordable and worthwhile by providing incentives greater than other states. While some housing agencies offer more generous programs or more variety, every state has mortgage programs. You could also take advantage of federal first-time home buyer programs that are available no matter where you live. Take the time to do thorough research on these programs and it could save you thousands of dollars.

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