Looking for First-Time Home Buyer Programs? Here Are 10 Things You Should Know

Buying your first home is exciting, but knowing where to begin can feel overwhelming. You may be searching for first-time home buyer programs, down payment assistance, FHA loans, or ways to reduce your closing costs. The good news is that you may have more options than you realize.

At La Hoyaa Lending, we believe home financing shouldn’t be complicated. We provide personalized guidance, practical tools, and a dedicated loan officer to help you understand your choices. Here are 10 important things to know as you explore your path to homeownership.

Important: Loan programs, income limits, funding, and eligibility requirements can change. Always confirm current requirements with your loan officer and the applicable government or housing agency.

1. “First-Time Homebuyer” Does Not Always Mean You Have Never Owned a Home

Many first-time home buyer programs use a three-year rule. In general, you may qualify as a first-time homebuyer if you have not owned and occupied a principal residence during the previous three years.

This means you may become eligible again after selling a previous home and waiting the required period. Program definitions can vary, especially when a spouse, co-borrower, or inherited property is involved, so your loan officer should review your situation individually.

If you are buying in California, CalHFA’s borrower eligibility guidance can help explain how the state defines first-time homebuyers.

2. Down Payment Assistance Is Only One Part of the Financing

Down payment assistance can help you cover some of the money needed to purchase a home. Depending on the program, assistance may be structured as:

• A deferred-payment second mortgage
• A forgivable loan
• A grant
• A shared-appreciation loan
• Assistance for down payment, closing costs, or both

These options do not all work the same way. Some must be repaid when you sell, refinance, transfer the home, or pay off the first mortgage. Others may be forgiven over time if you meet specific requirements.

That is why it is important to look beyond the advertised assistance amount. Ask how repayment works, whether the assistance accrues interest, whether there are occupancy requirements, and how the program may affect your future refinance or sale.

3. California’s MyHome Program May Help with Down Payment or Closing Costs

For eligible California buyers, the CalHFA MyHome Assistance Program provides a deferred-payment junior loan that may be used toward a down payment and/or closing costs.

According to CalHFA:

• With a CalHFA FHA loan, assistance may be up to the lesser of 3.5% of the purchase price or appraised value.
• With a CalHFA Conventional loan, assistance may be up to the lesser of 3% of the purchase price or appraised value.
• The home must generally be a single-family, one-unit residence, including approved condominiums and planned unit developments.
• You must occupy the property as your primary residence.
• Income limits and other program requirements apply.
• Eligible borrowers must complete approved homebuyer education and counseling.

CalHFA does not lend directly to consumers. You work with an approved lender who helps determine whether the program fits your finances and home purchase.

4. California Dream For All Has Different Rules

The California Dream For All Shared Appreciation Loan is designed for eligible first-generation homebuyers. It can provide up to 20% of the purchase price or appraised value for down payment and/or closing costs, subject to the program’s limits and funding availability.

However, this assistance is different from a traditional grant. When the home is sold, transferred, or the first mortgage is paid in full, the borrower generally repays the original assistance amount plus a share of the home’s appreciation.

CalHFA’s current program information says that:

• All borrowers must meet the first-time homebuyer definition.
• At least one borrower must be a first-generation homebuyer.
• At least one borrower must be a current California resident.
• Household income must meet the applicable county limit.
• Assistance is not to exceed $150,000.
• Voucher registration and random selection apply.

For 2026, CalHFA reported that the Dream For All portal closed to new applications on March 16. If you submitted an application, check your DFA Portal for your status. If you were not selected, you may still want to explore other CalHFA programs with your lender.

5. FHA Loans Can Offer a Lower Down Payment

FHA loans are a common option for first-time buyers because they may offer flexible qualifying requirements and a down payment as low as 3.5% for eligible borrowers.

The U.S. Department of Housing and Urban Development explains that FHA financing is available for eligible one- to four-unit properties and may offer low down payments and closing costs.

Keep in mind that FHA loans include mortgage insurance requirements. Your credit, income, debt, property type, and overall financial profile will still be reviewed. An FHA loan may be a helpful option, but it is not automatically the best choice for every buyer.

A loan officer can compare FHA financing with conventional options and help you evaluate your estimated monthly payment, cash needed, and long-term costs.

6. VA and USDA Loans May Offer Zero-Down Options

Some first-time buyers may qualify for a mortgage with no down payment.

A VA-backed purchase loan may offer no down payment for eligible veterans, active-duty service members, certain National Guard and Reserve members, and eligible surviving spouses. You must meet VA and lender requirements and occupy the home as your primary residence.

VA loans generally do not require private mortgage insurance, although a VA funding fee and other closing costs may apply.

A USDA loan may also offer 100% financing for eligible borrowers purchasing a qualifying home in an eligible area. USDA loans have household income limits, property location requirements, and occupancy rules. A participating lender can help you check the property and household requirements.

Neither VA nor USDA eligibility depends simply on being a first-time buyer. The programs are based on service history, income, location, and other guidelines.

7. Income Limits Are Often Based on Your County and Household

Many first-time home buyer programs are intended for low- to moderate-income households. Income limits can vary based on:

• The county where you plan to buy
• The number of people in your household
• The specific program
• Whether income is calculated for borrowers only or all adult household members

Earning too much for one program does not necessarily mean you are ineligible for all assistance. Another program may have different limits or requirements.

Before you begin making plans around a specific dollar amount, review the current program guidelines. For California programs, you can check CalHFA’s income limit information and ask your loan officer to confirm how the rules apply to your household.

8. Credit and Debt Still Matter

First-time buyer programs may make homeownership more accessible, but they do not remove the normal mortgage approval process. Your lender will review factors such as:

• Credit history and credit scores
• Monthly debt payments
• Income and employment
• Available assets
• Payment history
• Property details
• Debt-to-income ratio

Before applying, avoid opening unnecessary new accounts or taking on large purchases. Continue making payments on time and review your credit reports for errors.

Our mortgage credit guide provides more information about credit reports, scoring, and ways to improve your overall profile.

9. Be Ready to Provide Financial Documents

A complete application helps your lender evaluate your options more efficiently. You may be asked for:

• Recent pay stubs
• W-2 forms
• Tax returns, especially if you are self-employed
• Bank and investment account statements
• Information about current debts
• Gift documentation, if applicable
• Identification and employment history
• A signed purchase contract after you make an offer

Our mortgage application checklist explains many of the documents that may be requested.

Having your paperwork organized can make the process more productive. It also helps your loan officer identify potential questions early, so you can address them before closing.

10. Compare the Total Cost, Not Just the Down Payment

A smaller down payment can be helpful, but it is only one part of your home-buying budget. You should also consider:

• Monthly principal and interest
• Property taxes
• Homeowners insurance
• Mortgage insurance or guarantee fees
• HOA dues
• Closing costs
• Prepaid expenses
• Future maintenance and repairs

Down payment and closing costs are separate expenses. Your closing cost guide explains common charges and what may happen before and during closing.

Ask for a clear estimate of your total cash to close and your expected monthly payment. You can then compare programs based on the full financial picture rather than choosing an option based only on the advertised assistance.

Start with a Personal Review of Your Options

There is no single first-time home buyer program that works for everyone. The right choice may depend on your income, credit, savings, military service, household size, preferred property, and how long you expect to own the home.

We can help you evaluate FHA, conventional, VA, USDA, CalHFA, and other available financing options. Our dedicated loan officers provide individual attention, while our secure digital application helps you get started from wherever you are.

Review your home purchase options, start an application, or contact La Hoyaa Lending to go over your next steps. Home financing should feel clear, convenient, and supported from the beginning.