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First-Time Homebuyer Programs and Tips

Buying your first home is exciting and can sometimes be an overwhelming process. That’s why E-Central Credit Union is here to help guide you through each step. If you’re a first-time homebuyer, you may be able to take advantage of special government programs to help lower your costs. Regardless of the type of mortgage you select, there are a variety of important tips to consider when buying your first home.

Special Programs & Government Assistance for First-Time Homebuyers

Owning a home is part of the American Dream. To make that dream a reality, both the federal and state governments have created special programs to help first-time homebuyers get into a house of their dreams, or at least one they can afford. Here are some of the federal and state agencies that are making homeownership more affordable:

HUD and FHA Home Loan Programs

The U.S. Department of Housing and Urban Development (HUD) and Federal Housing Administration (FHA) offer several programs to help homeowners afford their home:
  • HUD’s Good Neighbor Next Door Program: If you are a police officer, pre-K through 12th grade teacher, emergency medical technician or firefighter, you may qualify for a substantial discount (up to 50%) on your home. Learn More.
  • HUD’s Public Housing Resident Program: If you are currently a resident of public housing, you may be able to convert your rent to a mortgage with this program. Learn More.
  • HUD’s Indian Home Loan Guarantee Program: If you are a Native American or Alaska native, you may be able to take advance of a lower down payment and flexible underwriting. Learn More.
  • FHA Loans: HUD oversees the FHA, and offers a first-time homebuyers program that can help lower your down payment (starting at just 3.5%), lower your closing costs and help you qualify. You can get an FHA loan from E-Central – ask your mortgage officer for more details. Learn More.
  • Habitat for Humanity Home Application: For those willing to actively participate in building their new home with other volunteers, consider applying to live in a Habitat home. Learn More.

California State Programs

In addition to federal programs, many states also offer special help to homeowners. Here are some of our top picks for prospective homeowners living in California.
  • California Department of Veterans Affairs: California veterans can take advantage of their money-saving home loans. Learn More.
  • Mortgage Credit Certificate Tax Credit Program: Californians may be able to leverage the Mortgage Credit Certificate (MCC) program to reduce their federal income tax liability to help create more money to go towards a mortgage payment. Learn More.
  • Extra Credit Teacher Home Purchase Program: The California Housing Finance Agency offers teachers and employees of public and charter schools in CA this special program, which can be combined with the CalFHA. View other programs offered by CalHFA. Learn More.

First-Time Homebuyer Tips

Besides special programs, there are a lot of tips that first-time homebuyers in California should consider:
  • Figure out how much home you can afford: A great place to start is our home affordability calculator to get a high-level estimate of what you can afford. Remember to account for taxes, PMI, your down payment, closing fees and home insurance. Fannie Mae recommends spending only 28% of your income on your home, but ultimately you need to decide what makes you comfortable. Remember: a house payment that stresses you out doesn’t make for a home you will love.
  • Don’t forget about closing costs: It’s a good idea to get an understanding of how much you’ll need to set aside or finance to close on your home. According to BankRate, the average closing costs in California are $2,257.
  • Gather your paperwork: Applying for a mortgage involves a lot of paperwork. Get organized by downloading our Mortgage Application Checklist.
  • Get your credit in line: It’s a great practice to pull your free annual credit report if you are in the market to buy a home because the higher your credit score, the lower the interest rate on your home loan. Find out if there are any errors and take the time to resolve any issues.
  • Find out if you qualify for any tax breaks: In addition to federal and state programs for first-time and prospective homebuyers, there are several tax credits you may be able to take advance of, like the mortgage interest credit, energy efficiency credits and lower-income housing credits.
Want to learn more about buying your first home or get pre-qualified? Call or email our home loan experts to set up a free initial consultation.

Everything, everywhere

E-Central Credit Union is a leading credit union located in Pasadena, California, serving Southern California members throughout Los Angeles County including Pasadena, South Pasadena, Alhambra, San Marino, Arcadia, Sierra Madre, Altadena, Temple City, Monrovia and beyond.