What are the Different Types of First-Time Home Buyer Programs?

First-time home buyer programs are government enterprises meant to make the purchase of a home more affordable and accessible to citizens. There are many different types of first-time home buyer programs; offerings tend to vary by region. Depending on the local region, programs may be available for any first-time buyer, for those below a certain income level, and sometimes for specific groups of citizens, such as military personnel.

Many first-time home buyer programs help buyers with the initial down payment on a home. Since a first-time buyer doesn't have previous equity from a home sale, he or she may find it more difficult to put up a large down payment on a home, even if family income is more than enough to cover the monthly payments on the house. By providing low-interest down payment loans to qualified applicants, these first-time home buyer programs allow people without a large lump sum to purchase a home.

In addition to down payment assistance, some regions have first-time home buyer programs that make financing a home loan more affordable. These programs usually work by covering additional fees such as closing costs for new buyers, or create special loans for first-time buyers that have a lower interest rate than a conventional home loan. Programs that assist with financing can make monthly payments more affordable for new buyers.

Tax credits and deductions are sometimes used to help first-time home buyers. These allow the buyer to deduct a percentage of the cost of the house or the amount of a home loan from his or her taxes in the year of purchase. These programs typically usually feature income and maximum deduction caps to limit the amount claimed on yearly taxes. Tax credits for first-time buyers change from year to year; regional and federal tax bureau websites usually have information on what credit programs are currently available.

In some cases, certain groups of citizens may be eligible for extended assistance programs for buying a home. Military personnel are sometimes given preferential loan rates and tax credits, both for first homes and later home purchases. Extremely low-income citizens may also be eligible for certain types of first-time home buyer programs with a strict income cap.

First-time home buyer programs may also exist for certain types of home purchases. In some regions, buying a newly constructed home as opposed to re-sold structure may result in increased financing options and higher tax credits. In an effort to reduce energy use, some regions also offer first-time buyer programs for homes that are certified as zero emission or energy-efficient homes.