May 17, 2021
Some people aren’t sure if they are considered first-time home buyers or not, and in some cases it definitely makes a difference.
Some people don’t realize they are considered first time home buyers even though they owned property in the past. It is important to know your status as a buyer as those eligible for first-time buyer status in local communities may qualify for down payment help on their FHA mortgages.
What does it take to be considered a first-time home buyer? What are the advantages?
There is a persistent myth about FHA home loans that fools some people from considering FHA loans as an option.
But if you have owned property in the past, depending on how far back in the past that home ownership goes, you may qualify again as a first-time buyer.
What Advantages Do First-Time Borrowers Have?
In some cases, first-time home buyer options or perks are offered by the lender. Depending on where you borrow, there may be programs offered to state residents–think local down payment assistance–who qualify for the local first-time home buyer programs.
And as mentioned earlier, some FHA loan applicants don’t realize they are considered first-time home buyers. Many down payment assistance programs will approve an applicant as a “first-time” home buyer if the applicant or applicants have not owned a home in the last three years.
Down Payment Help
If you qualify for a first-time home buyer program such as a down payment assistance grant or closing cost grant, a second mortgage for closing costs, or other assistance, you can save more money up front on the home loan.
Always ask if such programs make allowances for those who are buying homes for the first time in more than three years, or make allowances for those who are purchasing in certain qualifying areas, etc.
You will be surprised at the options offered to you in some cases.
Some programs aren’t as generous as others so you’ll want to make sure you know all the options open to you in the area where you wish to buy.
Some borrowers still buy into a prevailing, but untrue idea that FHA home loans are only for first-time home buyers and no one else may qualify. What is the reality?
The truth is that FHA loans are NOT restricted to first-time borrowers.
That said, local home buyer grants or down payment assistance programs often do require the applicant to be either a first-time buyer.
They may ALSO consider those applying after a long absence from home ownership. As a first-time borrower you have certain advantages in the home loan process, but you may still be offered such advantages if you have not owned a primary residence for three years or better.
Bruce Reichstein has spent over three decades as an experienced FHA and VA home loan mortgage banker and underwriter where he was responsible for funding “Billions” in government backed mortgage loans. He is the Managing Editor for FHANewsblog.com where he educates homeowners on the specific guidelines for obtaining FHA guaranteed home loans.
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