Contrary to what some might believe, the FHA home loan program does not favor first-time borrowers, first time home buyers, etc. There is no incentive program offered under the FHA loan program for these purchasers.

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FHA.com is a privately owned website, is not a government agency, and does not make loans.

FHA Loans, Down Payments, and First Time Home Buyers

March 10, 2015

Here is a variation on a commonly asked question about FHA home loans--these questions usually include one or more misconceptions about the FHA loan program:

“Can I qualify for any of FHA products for first time homebuyers? We would like to move to buy a new home, in my name only. I have never owned a home, Do I qualify for a FHA loan, or any of your listed down payment assistance programs?”

Contrary to what some might believe, the FHA home loan program does not favor first-time borrowers, first time home buyers, etc. There is no incentive program offered under the FHA loan program for these purchasers.

FHA home loans are offered through participating lenders who approve or deny loan applications based on financial qualifications provided by the borrower on employment history, current levels of personal debt, and other factors. FICO scores are an important part of the FHA loan approval process.

The lender would pull your credit report and check your FICO scores, financial obligation repayment history and other factors in order to determine whether the applicant is a good credit risk or not--these are the issues that determine whether the FHA loan is approved rather than the borrower’s status as a first-time homeowner.

Borrowers should know that the FHA does not offer down payment assistance. While it is true that FHA single family loan program requires a lower down payment than many conventional lenders (3.5% compared to 20% or better in some cases) it cannot offer down payment grants or assistance.

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